Why will smartphone shipments fall in 2026?

Question

Hans Steiner · Accepted Answer

Memory shortages are reshaping the phone market

Analysts are forecasting a steep drop in global smartphone shipments next year, driven primarily by a worldwide shortage of DRAM and other memory components. The shortfall is already reshuffling how chips are allocated: much of the available high‑capacity memory is being directed toward data centers and AI infrastructure as companies race to train and run large models, leaving consumer device makers with tighter supply and higher costs.

Research firm estimates put the decline at roughly the low‑teens percentage range year‑on‑year, with one projection trimming global shipments to about 1.1 billion units. The squeeze has particular impact on budget and midrange phones, which are sensitive to component cost increases and rely on thin margins.

What this means for consumers and the industry

Higher prices: OEMs will either absorb rising memory costs or pass them on, making low‑cost phones more expensive.
Fewer entry‑level models: Manufacturers may delay or cancel lower‑margin devices, concentrating on premium models where margins can tolerate component inflation.
Slower replacement cycles: Consumers faced with pricier new phones could hold onto their devices longer, dampening demand further.

Longer term, the memory shortage highlights a structural shift: the growth of AI infrastructure is competing directly with consumer electronics for the same component supply. Unless manufacturing capacity expands or allocations change, the effect will be felt across phones, cheap laptops, and other memory‑hungry devices, altering product roadmaps and pricing throughout 2026.