IDC Reports Record 22% Decline in Global Smartphone Shipments

The global smartphone market has experienced its steepest quarterly decline on record, with shipments falling 22% year-on-year to approximately 255.3 million units in the third quarter of 2026, according to preliminary data from market research firm International Data Corporation (IDC). The figures, released on October 15, highlight the growing pressure on manufacturers as the artificial intelligence boom drives demand for memory chips used in data centres. The same components are essential for smartphones, creating competition for limited supplies and pushing production costs higher. Although smartphone manufacturers have continued introducing new devices, the combination of expensive components and cautious consumer spending has weakened demand across much of the industry. IDC warned that the market has not yet reached its lowest point and that further challenges could emerge as supply constraints continue.

A major factor behind the downturn is the sharp increase in the cost of memory components, including dynamic random-access memory (DRAM) and NAND flash storage. IDC reported that memory costs had risen by approximately 350% compared with the previous year, putting considerable pressure on manufacturers’ profit margins. As AI companies invest heavily in data centres and advanced computing infrastructure, memory suppliers are facing growing demand from customers willing to pay high prices. Smartphone manufacturers have responded by increasing retail prices, reducing certain hardware specifications and reconsidering their production plans. These adjustments have made it more difficult to produce affordable smartphones, particularly for companies that depend heavily on low-cost devices. The situation demonstrates how the expansion of AI infrastructure is affecting other parts of the technology industry, including products used by billions of consumers worldwide.

The impact has varied significantly among leading smartphone brands. According to IDC’s preliminary estimates, Samsung shipped approximately 57.8 million devices during the quarter, representing a 5.8% decline from the same period in 2025. Apple shipped around 57.3 million units, down 4.0%, while Xiaomi recorded a much sharper decline of 29.2%, with shipments falling to 30.7 million units. OPPO’s shipments dropped 34.5% to 25.6 million, while vivo experienced a 31.5% decline to 19.1 million units. Samsung retained the leading position with a 22.6% market share, narrowly ahead of Apple’s 22.4%. The figures suggest that manufacturers with larger premium-device portfolios have been more resilient than brands that rely more heavily on price-sensitive market segments, although even the strongest performers experienced declining shipments.

Consumers are also changing their purchasing behaviour in response to higher prices. Rather than replacing their smartphones as frequently as before, many buyers are choosing to keep their existing devices for longer, purchase refurbished models or wait for discounts. The pressure is particularly significant in emerging markets, where affordability plays a major role in purchasing decisions. IDC has warned that the traditional entry-level smartphone segment is facing serious difficulties as manufacturers struggle to maintain low prices while covering higher component costs. Some companies may reduce the number of budget models they offer and concentrate on more expensive devices with better profit margins. While this strategy could help manufacturers protect their finances, it may leave lower-income consumers with fewer affordable choices and make it harder for first-time buyers to access modern smartphones.

Looking ahead, IDC expects the smartphone market to remain under pressure as manufacturers adjust to a more expensive supply environment. In its August 2026 forecast, the research firm projected that worldwide smartphone shipments would decline by 16.7% for the full year, falling to just over one billion units, while the average selling price would increase to approximately $581. The latest quarterly figures suggest that the downturn has intensified, although the full-year forecast and preliminary quarterly shipment estimates measure different periods and should not be directly compared. IDC expects meaningful market recovery to be unlikely before 2028 at the earliest. Manufacturers with stronger supply agreements, greater pricing power and diversified product portfolios may be better positioned to withstand the disruption. For consumers, the immediate consequences could include higher prices, fewer budget options and longer periods between upgrades as the smartphone industry adapts to the growing demands of the global AI economy.