Global smartphone shipments fell by 20% in the third quarter of 2026 compared to the same period last year, marking the worst third-quarter performance since 2012. According to the latest Counterpoint Research report, the main reasons behind the decline are the prolonged memory chip shortage and the massive, almost uncontrollable increase in manufacturing costs.
As memory component prices continue to rise, smartphone manufacturers are facing increasingly higher costs, prompting some to respond by raising retail prices, reducing production, or cutting back on their more affordable models. Data shows that average smartphone retail prices have increased by approximately 20% since the beginning of 2026, directly affecting demand.
The memory crisis has now severely impacted the market for the second consecutive quarter, changing consumer behavior in the process. A growing number of users are keeping their existing phones for longer or considering buying second-hand devices instead of upgrading to a new generation.
Global smartphone shipments hit their lowest third-quarter level since 2012, with budget and bid-range models hit hardest
At the same time, the market is becoming increasingly polarized. Demand for premium flagship smartphones remains relatively stable, while budget and mid-range models, whose customers are more sensitive to price increases, have been hit significantly harder.
Samsung retained first place in the third quarter with a 23% share of the global market. Although the company's shipments fell by 3% year-over-year, its market share still increased, with the Galaxy Z Fold8 cited as one of the main reasons behind this performance.
Apple took second place with a 22% market share, surpassing the 20% mark in the third quarter for the first time in the company's history. However, overall iPhone shipments were also lower than a year earlier, partly because the standard iPhone 18 was not introduced alongside the other models in September, while the iPhone 18 Pro models achieved a stronger initial performance than their predecessors.
Chinese manufacturers Xiaomi, OPPO, and vivo performed even worse, recording double-digit shipment declines during the three-month period. Xiaomi suffered the steepest decline, with shipments falling by more than 30%, while its global market share dropped to 10%.
As a result, Xiaomi is reportedly reducing its presence in the budget smartphone segment and less important overseas markets while simultaneously raising device prices to avoid a situation in which higher sales volumes generate increasingly lower profits.
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