Global smartphone shipments are projected to decline sharply in 2026 as rising component costs, supply chain disruptions and geopolitical tensions push manufacturers to prioritize margins over sales volumes, according to research firm Omdia.
Worldwide smartphone shipments are expected to fall 12.2% year-on-year to 1.09 billion units in 2026, representing a decline of about 152 million devices from 2025 levels, Omdia said in its latest market forecast. Despite weaker shipment volumes, the total value of the global smartphone market is forecast to rise 6.1% over the same period.
The divergence between falling shipments and rising market value is being driven by a steep increase in smartphone prices. Omdia estimates that the global average selling price for smartphones will climb to $565 in 2026 from $467 a year earlier, a 21% increase that would mark the industry’s largest annual jump in both percentage and dollar terms.
The increase is largely tied to surging component costs, particularly memory chips. Average prices for DRAM and NAND flash memory rose more than 80% quarter-on-quarter in the first quarter of 2026, with further increases recorded in the second quarter, according to the report. While the pace of increases is expected to moderate later in the year, component prices are likely to remain elevated.
“Smartphone vendors are navigating a period of significant disruption as they manage rising production costs,” Jusy Hong, Senior Research Manager at Omdia, said in the report. Some manufacturers have attempted to shield themselves from future increases by building larger component inventories, she added.
Omdia expects market conditions to begin stabilizing once memory prices level off, a shift the firm forecasts could occur in the second half of 2027.
Manufacturers are also reshaping product strategies to protect profitability. The report said many vendors are scaling back low-end smartphone offerings and focusing more heavily on mid-range and premium devices, where margins remain stronger.
That shift is expected to weigh more heavily on emerging markets across Africa, the Middle East and Latin America, where consumers remain more dependent on affordable smartphones and are typically more sensitive to price increases.
Developed markets, by contrast, are expected to prove more resilient because premium devices already account for a larger share of sales. Omdia noted that nearly all major smartphone brands, excluding Apple, have raised prices on their latest devices to offset higher manufacturing costs.
Runar Bjorhovde, Principal Analyst for smartphones at Omdia, said manufacturers are increasingly relying on broader ecosystems of connected devices and digital services to support profitability.
“Vendors capable of generating additional revenue through subscriptions, ecosystem products and digital services will be better positioned to navigate the current market environment,” he said.
Omdia expects the contraction in smartphone shipments to continue into 2027, although at a slower pace. The research firm said a meaningful recovery in shipment volumes is unlikely before 2028 as the cost of producing entry-level smartphones remains high.
The trend is expected to leave global brands cautious about expanding low-cost product portfolios, while the ultra-budget segment increasingly shifts to smaller regional manufacturers. In emerging markets, particularly in Africa, sustained price increases could slow smartphone adoption and deepen affordability challenges over the coming years.
