The global smartphone market is now bracing for its sharpest downturn ever in 2026m with shipments expected to fall 12.9% to 1.12 billion units, according a new report from IDC. According to a report by Reuters, the figure marks the lowest level in more than a decade and signals a structural reset for the industry. As reported by Reuters, IDC analysts say that the decline is being driven by surging memory chip (DRAM) prices, which are essential for running power-hungry smartphone applications. “What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain,” said Francisco Jeronimo, IDC’s vice president for Worldwide Client Devices.The rapid build-out of AI infrastructure by tech companies like Google, Meta and Microsoft has diverted much of the memory chip supply to data centers, leaving consumer devices squeezed and costs soaring.

Impact on manufacturers

The crisis is expected to hit low-end Android manufacturers hardest, forcing many to pass rising costs onto consumers or exit the market. By contrast, Apple and Samsung, with stronger balance sheets and premium positioning, are expected to gain market share. IDC forecasts the average selling price of smartphones will surge 14% to a record $523 this year, as manufacturers shift toward higher-margin models to offset ballooning costs.

Long-term outlook

While IDC expects a modest 2% recovery in 2027 and a 5.2% rebound in 2028, analysts warn the market will not return to previous norms. “The memory crisis will cause more than a temporary decline; it marks a structural reset of the entire market,” said Nabila Popal, senior research director at IDC’s Mobile Phone Tracker. She added that the sub-$100 smartphone segment, representing 171 million devices, will become “permanently uneconomical” even after memory prices stabilize by mid-2027.