Global smartphone shipments are projected to fall by 12.2% year-on-year in 2026, dropping by 152 million units from 1.246 billion in 2025 to 1.093 billion in 2026, according to a report released Tuesday by Omdia. The decline is attributed to a sharp rise in memory chip prices, with average DRAM and NAND flash memory costs increasing by over 80% quarter-on-quarter in the first quarter of 2026. Further price hikes are expected through the second half of 2026. The average selling price of a smartphone is also forecast to rise from $467 in 2025 to $565 in 2026, contributing to lower shipment volumes. Jusy Hong, Senior Research Manager at Omdia, said the global smartphone industry is experiencing significant disruption, with manufacturers adjusting inventory strategies to manage rising component costs. Some vendors are stockpiling components early to limit exposure to future price increases. The chip shortages and price surges are linked to increased demand for AI models, which are diverting production capacity away from consumer devices. Regional conflicts and supply chain disruptions are also affecting global smartphone import and export flows. With new device production under pressure, demand for refurbished smartphones is expected to grow as consumers seek more affordable alternatives. This shift is likely to further reduce shipment numbers for new devices. The first quarter of 2026 already saw a 6% year-on-year decline in global smartphone shipments, signaling the start of sustained market pressure. The report suggests this trend will continue through 2026 and possibly into 2027, with stabilisation not expected until early 2028. That recovery hinges on supply capacity expansion and the trajectory of AI data centre demand. Memory prices are forecast to begin correcting by the end of 2027. However, the baseline cost of manufacturing smartphones priced under $100 will remain high, preventing any significant reduction in retail prices for budget devices.
The projected surge in smartphone prices is framed as an unavoidable market response, yet manufacturers continue to prioritise high-margin devices over affordable models. Nigerian consumers, who rely heavily on sub-$100 phones, will find no relief as production costs remain prohibitive. The shift toward refurbished devices may accelerate, but no major vendor is adapting to this demand. The industry's focus on AI-driven chips over basic phone access reveals a growing disconnect with emerging markets.
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