IDC: Memory Shortage May Trigger Record Shrinkage in Smartphone Market This Year

Industry research firm IDC warns in its latest report that the global smartphone market will face an unprecedented crisis in 2026 due to memory shortages.

IDC has significantly lowered its 2026 smartphone shipment forecast to approximately 1.1 billion units, well below last year’s 1.26 billion. This indicates that the smartphone market may experience a record 13% year-over-year decline this year.

Nabila Popal, IDC’s Senior Research Director, stated, “Compared to the memory crisis, tariffs and pandemic shocks seem insignificant. When this current crisis ends, the smartphone market will undergo a dramatic shift in scale, average selling price, and competitive landscape. We expect it will take at least until mid-2027 for conditions to ease.”

Analysis points out that faced with sharp increases in the cost of key components, phone manufacturers can only respond by tightening configurations, phasing out unprofitable entry-level models, and encouraging consumers to upgrade to higher-end devices. IDC believes that in recent years, many vendors have launched entry-level devices to compete for market share, which are more vulnerable to cost pressures because memory prices constitute a larger portion of overall material costs.

Of course, compared to rising prices, a more severe problem for smartphone manufacturers is the inability to secure enough chips. Qualcomm CEO Amon mentioned after releasing quarterly earnings this week, “The issue now is not just price but also supply availability. I believe how much memory manufacturers can provide will determine the overall size of the smartphone market.”

Interestingly, there are rumors on the market this Thursday about Apple and Samsung Electronics negotiating to purchase LPDDR5X memory: Samsung initially aimed for only a 60% price increase, so they tentatively proposed a 100% increase, but unexpectedly, Apple agreed outright to ensure supply. Even so, memory supply for Apple in the second half of this year has yet to be secured.

This news has not been officially confirmed, but as a “supply chain master,” Apple is also forced into such a situation, and other manufacturers are likely facing similar troubles.

IDC further states that even if memory shortages ease after 2027, the smartphone market is unlikely to return to previous pricing structures.

Popal said, “The era of low-cost smartphones is over. Even if the memory crisis eases, we do not expect memory prices to return to 2025 levels.”

IDC pointed out that last year, approximately 170 million smartphones priced below $100 were shipped, and this segment is now unprofitable.

(Source: Cailian Press)