Global smartphone shipments fell 20% year over year in the third quarter, reaching their lowest level for the period since 2012 as memory shortages linked to artificial intelligence infrastructure raised costs, constrained supply and pushed phone prices higher.
The preliminary figures from Counterpoint Research, reported by Reuters on October 12, show that the shortage is affecting smartphone manufacturers as AI infrastructure projects consume available memory-component supply. Vendors are cutting shipments, tightening product portfolios and prioritizing profitability over volume.
Q3 smartphone shipments fall to their lowest level since 2012
Counterpoint attributed the decline to rising DRAM and NAND prices, higher bills of materials and worsening supply shortages. The research firm said global smartphone retail prices had risen 20% so far in 2026 as manufacturers passed higher component costs to consumers.
Samsung retained the largest market share at 23%, although its shipments declined 3% from a year earlier. Apple reached a 22% share, crossing 20% for the first time in a third quarter despite lower year-over-year shipments. OPPO and vivo each recorded shipment declines of more than 20%, while Xiaomi shipments fell more than 30% and its share dropped to 10%.
Higher memory prices are widening the gap between premium and budget phones
Counterpoint said premium demand remained comparatively resilient while higher prices put greater pressure on price-sensitive segments. Manufacturers are adjusting portfolios, pricing and market strategies to protect profitability, including reducing exposure to lower-priced devices and shifting supply toward higher-return models.
Reuters quoted Counterpoint senior analyst Shilpi Jain as saying that consumers are holding onto their phones longer, considering refurbished devices more often and prioritizing higher-value products.
Budget buyers face the sharpest pressure through the rest of 2026
Counterpoint said the outlook for the remainder of 2026 remains challenging. Production cuts, tighter portfolios and a stronger focus on premium devices are likely to continue, while price-sensitive segments face higher prices and limited component availability.
For buyers, the practical response is to delay an upgrade when the current phone still receives security updates, compare certified refurbished models and check storage and memory configurations carefully before purchasing.
Refurbished phones become a practical hedge against rising prices
- Confirm that your current phone still receives operating-system and security updates.
- Compare a new device with a certified refurbished model, including battery condition and warranty coverage.
- Review storage and memory specifications because lower-priced models are facing the greatest affordability pressure.
The broader lesson is that the AI infrastructure boom is competing with consumer electronics for the same memory supply. Until component costs and availability improve, smartphone makers are likely to ship fewer devices and emphasize more profitable models.
References
Counterpoint Research. (2026, October 12). Global smartphone shipments hit a new low with 20% YoY decline, lowest in 14 years as continued memory constraints tighten supply. https://counterpointresearch.com/en/insights/global-smartphone-shipments-hit-a-new-low-with-20-percent-yoy-decline-lowest-in-14-years
Reuters. (2026, October 12). Global smartphone shipments record worst third quarter in 14 years amid memory shortage. Investing.com. https://www.investing.com/news/stock-market-news/global-smartphone-shipments-record-worst-third-quarter-in-14-years-amid-memory-shortage-4944572