Omdia: Global Smartphone Shipments to Fall 7% in 2026 Amid Memory Constraints and Geopolitical Pressures
5 min read
Global smartphone shipments are forecast to decline by around 7% year-on-year in 2026, according to Omdia's latest outlook. The projection is based on Q1 memory price assumptions, which indicate that pricing pressure and constrained supply will begin to ease in the second half of the year. Memory now accounts for a significantly larger share of the smartphone bill of materials (BOM), eroding vendor profitability — particularly in entry-level devices.
Since Q4 2025, smartphone manufacturers have already begun raising retail prices to maintain profit margins. However, sustained price increases are likely to weaken demand, particularly in price-sensitive emerging markets.
Downside Risks Could Push Decline Beyond 15%
Downside risks to the forecast remain significant. If memory prices continue rising into the second half of 2026 — driven by tight supply and increasing AI server demand locking in production capacity — smartphone vendors will face further cost escalation across both entry-level and premium devices. Compounding this, escalating geopolitical tensions in the Middle East could amplify macroeconomic volatility, including higher energy prices, freight costs, and foreign-exchange instability.
Under this downside scenario, global smartphone shipments are expected to decline by more than 15% in 2026, potentially exceeding the 12% contraction recorded in 2022.
Impact Across Price Segments
"Rising memory costs and macro headwinds are expected to impact smartphone demand unevenly across price segments. Devices priced below $100 are forecast to decline by nearly 31% year-on-year in 2026, reflecting the severe margin pressure vendors face in ultra-low-cost segments. Smartphones in the $100–$399 range, which represent the core volume bands of the global market, are also expected to contract as rising memory prices push retail prices upward in price-sensitive markets."
— Zaker Li, Principal Analyst, Omdia
Entry-focused vendors that rely heavily on LPDDR4X memory, operate with thin margins, and often have lower priority in the memory supply chain are among the most exposed. Many are projected to experience double-digit shipment declines in 2026.
Premium Segment Holds Firm
In contrast, the premium segment remains relatively resilient. Devices priced above $800 are forecast to grow by around 4% in 2026, supported by stronger brand positioning and greater pricing flexibility. Apple maintains a dominant presence in the high-end market and benefits from strong supply chain relationships and higher margins that help absorb component cost inflation. Samsung also benefits from vertical integration and internal semiconductor capabilities, providing greater security of supply and priority access to key components.
Supply Chain Ripple Effects
"The evolving cost environment is reshaping dynamics across the global smartphone supply chain. As entry-level smartphone demand weakens, suppliers of mid- and low-end components — including chipsets, camera modules, and other key parts — are likely to face declining orders and intensified pricing pressure. Smaller ODMs and specialized component suppliers will also face growing consolidation risks as margins compress and demand becomes more concentrated among leading brands."
— Zaker Li, Principal Analyst, Omdia
Vendors are already responding by simplifying product configurations and tightening BOM costs. Volatility in memory pricing is also pushing brands toward shorter-term production planning and smaller order volumes — increasing operational pressure across the supply chain. In this environment, vendors will need to prioritize higher-value product innovation and disciplined production planning, while channel partners strengthen inventory management and demand forecasting.
Key Takeaways
- Omdia forecasts global smartphone shipments to fall ~7% in 2026, driven by memory cost inflation and geopolitical headwinds
- A downside scenario could see declines exceed 15% — surpassing the 12% contraction seen in 2022
- Sub-$100 devices face the steepest drop at nearly 31%; mid-range $100–$399 handsets are also expected to contract
- Premium devices above $800 are forecast to grow ~4%, with Apple and Samsung best positioned to weather the storm
- Supply chain consolidation risks are rising for smaller ODMs and component suppliers as margins compress and orders decline