smartphone shipments — Global smartphone shipments fell by 4 per cent year-on-year in the second quarter of 2026 as an ongoing memory crisis disrupted supply chains and pushed up component costs, according to research from market intelligence firm Omdia.
- This decline has resulted in a sharply polarised smartphone market, where major manufacturers are experiencing varied outcomes based on their strategies and customer focus.
- However, following a price increase across several other product categories at the end of the second quarter, questions have arisen regarding potential impacts on iPhone pricing later in 2026.
This decline has resulted in a sharply polarised smartphone market, where major manufacturers are experiencing varied outcomes based on their strategies and customer focus.
Smartphone shipments: Market Leaders Navigate Challenges
Despite the overall downturn, Samsung and Apple emerged as outliers, increasing their shipments and fortifying their market positions compared to the same quarter in 2025. Samsung retained its title as the largest smartphone vendor, capturing 22 per cent of the global market. This success was bolstered by robust demand and improved supply availability.
The delayed launch of the Galaxy S26 series shifted some premium smartphone demand into the second quarter, while Samsung gained traction in the budget segment as its Chinese competitors adopted more cautious strategies.
Apple’s Strong Performance in a Weak Quarter
Apple also reported its strongest second-quarter performance on record, achieving a 20 per cent market share during a traditionally slow sales period. The iPhone 17 series played a pivotal role in triggering one of the most significant upgrade cycles in the company’s history. Apple managed to maintain stable pricing, which stood in contrast to many rivals that opted to raise their prices.
However, following a price increase across several other product categories at the end of the second quarter, questions have arisen regarding potential impacts on iPhone pricing later in 2026.
Struggles for Other Manufacturers
In stark contrast to the successes of Samsung and Apple, other major manufacturers faced significant pressure. Xiaomi held onto third place globally with an 11 per cent market share, while OPPO ranked fourth with a 10 per cent share, restructuring its operations around a three-brand strategy. Vivo completed the top five with an 8 per cent market share.
According to Omdia Principal Analyst Runar Bjorhovde, “The steepest volume drops hit the sub-$400 mass market segment, where supply constraints are tightest, profit margins are slimmest, and price sensitivity is highest.”
Shifting Strategies Amid Rising Costs
To adapt to the challenging landscape, vendors are shifting their strategies from volume to value. Many are reoptimising their portfolios and adjusting retail pricing to cope with rising component costs, particularly in memory and storage, which now account for over 60 per cent of the bill of materials for budget smartphones.
Memory costs have surged to levels more than four to five times higher than those seen a year ago, complicating manufacturers’ ability to maintain profitability. Additionally, new semiconductor bottlenecks, including constraints affecting chip foundries, are further driving up costs.
Future Outlook for the Smartphone Market
Omdia predicts that the most significant shipment declines will occur over the next two quarters, coinciding with seasonal demand peaks driven by new product launches and shopping events. As a result, vendors are likely to focus more on the higher price segments to capitalise on consumers looking to upgrade their devices.
However, this shift towards more expensive devices could limit the range of affordable options available to consumers. Many buyers in lower-income segments may delay purchases, lower their expectations, consider financing options, or opt for refurbished smartphones. As manufacturers try to balance rising production costs with diminishing demand, the smartphone market faces a complex and challenging landscape.
