The global smartphone market is expected to face one of its most challenging years in 2026, according to the latest report by the International Data Corporation (IDC).
Surging demand for artificial intelligence technologies has placed sustained pressure on memory supplies, contributing to a broader chip shortage. As a result, IDC projects a sharp decline in smartphone shipments this year, alongside a rise in average selling prices.
The research firm indicates that the downturn may mark a structural shift rather than a temporary slowdown.
Decline
IDC forecasts that worldwide smartphone shipments will fall 12.9 percent year-on-year in 2026, reaching approximately 1.1 billion units. This would represent the lowest annual shipment volume recorded in more than a decade.
The projected contraction reflects supply constraints and rising component costs, particularly memory chips, which have become increasingly scarce due to heightened AI-driven demand across industries.
| Year | Global Shipments | YoY Change |
|---|---|---|
| 2025 | Higher baseline | – |
| 2026 | 1.1 billion units | -12.9 percent |
The decline is expected to be more pronounced in regions heavily dependent on low-end smartphones.
Impact
According to Francisco Jeronimo, Vice President for Worldwide Client Devices at IDC, Android manufacturers operating primarily in the budget segment face significant pressure.
Rising component costs are likely to reduce margins for these vendors, leaving limited options other than passing higher costs on to consumers. In contrast, larger brands such as Apple and Samsung are considered better positioned to absorb cost increases and maintain market stability.
IDC suggests that stronger balance sheets, diversified supply chains, and premium product portfolios provide these companies with a competitive advantage during periods of supply disruption.
Consolidation
Nabila Popal, Senior Research Director with IDC’s Worldwide Quarterly Mobile Phone Tracker, described the memory shortage as a structural reset for the smartphone industry.
She noted that the crisis could reshape the long-term total addressable market, alter the vendor landscape, and change the overall product mix. IDC anticipates increased industry consolidation, with smaller and budget-focused manufacturers potentially exiting the market.
The sub-$100 smartphone segment, in particular, may become permanently unviable if memory prices remain elevated. IDC does not expect pricing levels to return to previous lows, even after stabilisation.
Prices
Despite the decline in shipments, average selling prices are projected to rise significantly. IDC estimates that the global ASP will increase 14 percent to a record $523, or approximately Rs. 47,000, in 2026.
| Metric | 2026 Projection |
|---|---|
| Average Selling Price | $523 |
| YoY ASP Growth | 14 percent |
The rise in prices reflects higher component costs and a potential shift toward mid-range and premium devices as entry-level models become less sustainable.
IDC expects memory prices to stabilise by mid-2027. However, stabilisation does not necessarily imply a return to earlier pricing levels. The firm believes the industry will operate under a new cost structure going forward.
Regions
The impact of the slowdown is expected to vary by region. Markets with a higher concentration of low-end smartphones are projected to experience steeper declines.
| Region | Expected YoY Decline |
|---|---|
| Middle East and Africa | 20.6 percent |
| China | 10.5 percent |
| Asia Pacific (excluding Japan and China) | 13.1 percent |
The Middle East and Africa region is forecast to see the sharpest contraction, largely due to its dependence on entry-level smartphones, which are more sensitive to cost increases.
Recovery
Looking ahead, IDC anticipates a modest recovery once supply conditions improve. The firm projects a 2 percent rebound in 2027 after memory prices stabilise by mid-year. A stronger 5.2 percent year-on-year recovery is expected in 2028.
However, IDC maintains that the market will not revert to its previous structure. Instead, the industry is likely to emerge with a leaner vendor base, higher average prices, and a reduced presence in ultra-low-cost segments.
The global smartphone market in 2026 is set to record its lowest shipment levels in over a decade, driven by sustained memory shortages and rising component costs. IDC’s projections point to a 12.9 percent decline in shipments, alongside a 14 percent rise in average selling prices. While a gradual recovery is expected from 2027 onward, the industry may undergo lasting structural changes, including consolidation and a reduced role for entry-level devices.
FAQs
How much will shipments decline in 2026?
About 12.9 percent year-on-year.
What is the projected shipment volume?
Around 1.1 billion units.
Why are smartphone prices rising?
Due to memory chip shortages.
Which region will decline the most?
Middle East and Africa.
When will recovery begin?
A modest rebound is expected in 2027.
