The memory chip crisis has contracted the global smartphone market and forced manufacturers to alter their strategies. The budget segment is increasingly squeezed by rising component costs, while demand for premium models remains stable.
A recent report by Counterpoint Research confirms this situation, noting a 20% year-on-year decline in smartphone shipments. The primary cause is supply issues regarding DRAM and NAND chips, which drove up manufacturing costs and caused global smartphone prices to rise by approximately 20% throughout 2026.
In Q3 2026, the global smartphone landscape revealed a widening gap between major brands. Samsung retained the top spot with a 23% market share, despite a 3% drop in shipments compared to the previous year; its focus on the premium segment and the launch of the Galaxy Z Fold8 series helped maintain its position. Meanwhile, Apple set a new record, capturing 22% of the market. Although total volume declined due to the absence of a standard iPhone 18 model, the iPhone 18 Pro series saw strong reception in China and India, driving Apple's performance.
In contrast, Xiaomi experienced a year-on-year decline of over 30%, with its market share falling to 10%. Efforts to pivot to the premium segment via the Xiaomi 18 series and the in-house XRING O3 chip were still overshadowed by cost pressures. Oppo’s market share shrank to 9% as shipments fell by more than 20%, prompting the company to merge operations with Realme and OnePlus to cut costs and boost efficiency. Meanwhile, vivo’s market share dropped to 8%, following a shipment decline of over 20%. Their focus on India and China is insufficient to offset price increases that are undermining the appeal of their budget models.
The smartphone market is expected to continue facing challenges throughout the year. Manufacturers are now prioritizing profitability over production volume by focusing on premium devices that enjoy strong demand. Conversely, the budget segment is increasingly squeezed by high prices and component shortages. A full recovery is expected only when component costs decrease and supplies stabilize.
