Smartphone shipments fall 20% in third quarter as memory shortages raise costs

Global smartphone shipments dropped 20% from a year earlier in the third quarter of 2026, reaching their lowest level for that quarter since 2012, according to preliminary Counterpoint Research estimates reported by Reuters on CNA.

The 14-year third-quarter low comes as rising memory-chip costs and constrained component supplies put pressure on manufacturers. The report links those pressures to artificial intelligence infrastructure projects drawing on memory supplies, raising production costs for phone makers.

Memory chips store the data a device needs, including working information and retained files. The report’s market assessment concerns the cost and availability of those components; it does not provide a new retail price for every model or say all manufacturers face identical supply conditions.

Manufacturers have responded with higher retail prices, shipment cuts and a greater focus on profitability. Counterpoint senior analyst Shilpi Jain said consumers were keeping devices longer than expected, increasingly considering refurbished phones and prioritising higher-value devices.

The preliminary shipment estimate captures devices entering the market. It should not be read as an identical percentage decline in completed retail purchases or as a measure of the number of people using smartphones.

Samsung retained first place with a 23% share. Its shipments nevertheless fell 3% year on year. Counterpoint attributed its relative performance to demand for the Galaxy Z Fold8 and stable component supplies for mid-range devices.

Apple’s share reached 22%, crossing 20% in a third quarter for the first time, despite a year-on-year decline in shipments. Counterpoint said the absence of a base iPhone 18 reduced launch-month channel fill compared with the full iPhone 17 lineup a year earlier. Channel fill describes devices placed into distribution around a launch.

A rising share alongside lower shipments is possible because share is a proportion of the whole market. In a contracting market, a supplier whose shipments fall less than the total can account for a larger portion without shipping more phones.

OPPO and vivo each recorded shipment declines of more than 20%. Xiaomi’s shipments fell more than 30%, reducing its share to 10%. It cut exposure to lower-priced devices and some overseas markets to protect margins as costs rose.

Counterpoint expects a difficult remainder of 2026, with continued production cuts, tighter model ranges and greater emphasis on premium devices. It says price-sensitive segments face additional pressure from higher device prices and constrained components.

The outlook remains Counterpoint’s forecast. The reported third-quarter results are preliminary estimates for a completed quarter, separate from its expectations for the rest of the year.