That increase mattered most at the lower end of the market. Memory represents a larger share of the bill of materials for inexpensive devices, leaving manufacturers with fewer options: raise prices, accept narrower margins, reduce specifications or limit shipments. Counterpoint’s broader market analysis similarly found that lower-end manufacturers and emerging markets were facing the sharpest pressure from the supply crisis.

By Q2, the increase in memory costs had raised the bill-of-materials cost of low-end smartphones by 70% year over year and contributed to lineup reductions.

Q1 inventory building made the Q2 decline sharper

Some manufacturers ordered additional components in Q1 to lock in lower prices and prepare for anticipated price increases. Latin American smartphone shipments consequently rose 2% year over year in Q1 as vendors built inventory.

That pull-forward made the Q2 comparison more difficult. After the inventory build, vendors became more cautious as the memory shortage deepened and price adjustments took effect. The result was a Q2 pullback rather than a smooth continuation of the Q1 increase.

Inflation and political uncertainty weakened purchasing power

Price increases were partly cushioned by currency appreciation in several Latin American markets. That helped limit the immediate impact on consumers, but it also reduced the extent to which manufacturers could pass through higher component costs without compressing their margins.

The price increases that did reach shoppers were especially damaging in the entry and mid-range segments, where buyers are more sensitive to even modest changes in handset prices. Inflation in Colombia, Mexico and Brazil further reduced real purchasing power, while political uncertainty in Colombia and Brazil encouraged some consumers to defer purchases.

Brand performance: Samsung and Apple grew while rivals declined

The market contraction did not affect every manufacturer equally. Samsung and Apple were the only key brands to post shipment growth among the leading players, while brands with greater exposure to affordable phones experienced sharper declines.

• Samsung: Shipments increased 6% year over year, giving the company a 38% share of the regional market. Samsung regained first place in Colombia, Ecuador and Peru.
• Apple: Shipments grew 5% year over year. Apple held roughly 51% of the premium segment above $600, compared with approximately 40% for Samsung.
• Motorola: Shipments fell 14% year over year, although its average selling price increased. It remained Latin America’s second-largest brand.
• Xiaomi: Shipments declined 27% year over year, with supply availability affected in part by the company’s prioritization of China.
• Honor: Shipments fell 8% year over year as tight memory supply and higher prices pressured its portfolio.

Why Samsung and Apple outperformed

Samsung benefited from availability and distribution

Samsung entered the downturn with substantial inventory and a broad portfolio spanning the Galaxy A and Galaxy S series. Its presence in physical stores and online channels, combined with aggressive discounting, helped keep products available while competitors faced tighter supply or greater exposure to price-sensitive models.

That combination allowed Samsung to gain share even as the total market shrank. Its performance also illustrates why supply and channel execution mattered as much as consumer demand during the quarter.

Apple was insulated by its premium mix

Apple’s stronger performance reflected its position at the high end of the market. The company absorbed some of the cost increases rather than passing all of them to buyers, while demand remained resilient for the iPhone 17 Pro Max. The iPhone 17e, launched in late March, gained momentum during Q2, and older models continued to sell steadily.

Premium buyers are generally less sensitive to component-driven price increases than entry-level shoppers. Apple’s established premium positioning therefore protected it from the worst effects of the affordable-phone downturn, even as the broader regional market contracted.

Motorola improved visibility but not volume

Motorola refreshed its G, Edge and Razr product lines and used FIFA World Cup 2026 marketing to increase visibility and average selling prices. Those efforts were not enough to offset the company’s 14% shipment decline, however.

What happens next?

The pressure is likely to continue beyond Q2. Counterpoint expects memory-related cost and supply constraints to persist through the second half of 2026, while mobile DRAM prices were projected to rise by about 10% quarter over quarter in Q3.

The outlook points to a market increasingly divided by price tier. Before the shortage eases, low- and mid-priced models are expected to lose sales share as manufacturers constrain affordable portfolios and premium devices become relatively more resilient.

Counterpoint’s available outlook indicates that memory availability and pricing—not just underlying consumer demand—will shape smartphone market performance over the next 18 to 24 months. The shortage is expected to begin easing around the end of 2027, with a broader recovery potentially beginning in 2028.

There is not yet a specific publicly available Latin America shipment percentage forecast for the second half of 2026 or full-year 2027 in the supplied research. The regional outlook is therefore directional: continued pressure on affordable phones, greater resilience among premium brands and a likely widening gap between manufacturers with strong supply, distribution and pricing power and those concentrated in lower-cost devices.

That increase mattered most at the lower end of the market. Memory represents a larger share of the bill of materials for inexpensive devices, leaving manufacturers with fewer options: raise prices, accept narrower margins, reduce specifications or limit shipments. Counterpoint’s broader market analysis similarly found that lower-end manufacturers and emerging markets were facing the sharpest pressure from the supply crisis.

By Q2, the increase in memory costs had raised the bill-of-materials cost of low-end smartphones by 70% year over year and contributed to lineup reductions.

Q1 inventory building made the Q2 decline sharper

Some manufacturers ordered additional components in Q1 to lock in lower prices and prepare for anticipated price increases. Latin American smartphone shipments consequently rose 2% year over year in Q1 as vendors built inventory.

That pull-forward made the Q2 comparison more difficult. After the inventory build, vendors became more cautious as the memory shortage deepened and price adjustments took effect. The result was a Q2 pullback rather than a smooth continuation of the Q1 increase.

Inflation and political uncertainty weakened purchasing power

Price increases were partly cushioned by currency appreciation in several Latin American markets. That helped limit the immediate impact on consumers, but it also reduced the extent to which manufacturers could pass through higher component costs without compressing their margins.

The price increases that did reach shoppers were especially damaging in the entry and mid-range segments, where buyers are more sensitive to even modest changes in handset prices. Inflation in Colombia, Mexico and Brazil further reduced real purchasing power, while political uncertainty in Colombia and Brazil encouraged some consumers to defer purchases.

Brand performance: Samsung and Apple grew while rivals declined

The market contraction did not affect every manufacturer equally. Samsung and Apple were the only key brands to post shipment growth among the leading players, while brands with greater exposure to affordable phones experienced sharper declines.

• Samsung: Shipments increased 6% year over year, giving the company a 38% share of the regional market. Samsung regained first place in Colombia, Ecuador and Peru.
• Apple: Shipments grew 5% year over year. Apple held roughly 51% of the premium segment above $600, compared with approximately 40% for Samsung.
• Motorola: Shipments fell 14% year over year, although its average selling price increased. It remained Latin America’s second-largest brand.
• Xiaomi: Shipments declined 27% year over year, with supply availability affected in part by the company’s prioritization of China.
• Honor: Shipments fell 8% year over year as tight memory supply and higher prices pressured its portfolio.

Why Samsung and Apple outperformed

Samsung benefited from availability and distribution

Samsung entered the downturn with substantial inventory and a broad portfolio spanning the Galaxy A and Galaxy S series. Its presence in physical stores and online channels, combined with aggressive discounting, helped keep products available while competitors faced tighter supply or greater exposure to price-sensitive models.

That combination allowed Samsung to gain share even as the total market shrank. Its performance also illustrates why supply and channel execution mattered as much as consumer demand during the quarter.

Apple was insulated by its premium mix

Apple’s stronger performance reflected its position at the high end of the market. The company absorbed some of the cost increases rather than passing all of them to buyers, while demand remained resilient for the iPhone 17 Pro Max. The iPhone 17e, launched in late March, gained momentum during Q2, and older models continued to sell steadily.

Premium buyers are generally less sensitive to component-driven price increases than entry-level shoppers. Apple’s established premium positioning therefore protected it from the worst effects of the affordable-phone downturn, even as the broader regional market contracted.

Motorola improved visibility but not volume

Motorola refreshed its G, Edge and Razr product lines and used FIFA World Cup 2026 marketing to increase visibility and average selling prices. Those efforts were not enough to offset the company’s 14% shipment decline, however.

What happens next?

The pressure is likely to continue beyond Q2. Counterpoint expects memory-related cost and supply constraints to persist through the second half of 2026, while mobile DRAM prices were projected to rise by about 10% quarter over quarter in Q3.

The outlook points to a market increasingly divided by price tier. Before the shortage eases, low- and mid-priced models are expected to lose sales share as manufacturers constrain affordable portfolios and premium devices become relatively more resilient.

Counterpoint’s available outlook indicates that memory availability and pricing—not just underlying consumer demand—will shape smartphone market performance over the next 18 to 24 months. The shortage is expected to begin easing around the end of 2027, with a broader recovery potentially beginning in 2028.

There is not yet a specific publicly available Latin America shipment percentage forecast for the second half of 2026 or full-year 2027 in the supplied research. The regional outlook is therefore directional: continued pressure on affordable phones, greater resilience among premium brands and a likely widening gap between manufacturers with strong supply, distribution and pricing power and those concentrated in lower-cost devices.