Smartphones are headed for their largest annual recession and cheap categories are at risk of disappearing
The global smartphone market is headed for its largest annual contraction on record, with shipments expected to fall 13.9% this year to 1.08 billion units, according to a report by Google. "Counterpoint Research" issued on Monday, which indicated a worsening Memory chips.
This forecast represents a decrease from the 12.4% decline expected in February, as the global chip shortage worsened due to the Iranian war.
The most severe impact on the economic category
The impact is sharply concentrated on low-cost smartphones, as chip manufacturers shift their production capacity to artificial intelligence chips, making the production of low-cost devices less economically feasible.
And the Global wholesale prices for smartphones fell by 14% in the first quarter, while shipments fell by 3.1% year-on-year. This trend is expected to continue as inventory builds up before supply runs out, with some models priced under $150 likely to disappear from the market.
Wang Yang, senior analyst at "Counterpoint": "Smartphone manufacturers in the middle and economic segments face great difficulty between high costs that they cannot absorb, and the limited purchasing power of consumers."
He added: "The question is no longer how to increase shipments or market share, but whether staying in the market at all is feasible"
Wang explained that the shortage of memory chips is the most serious supply chain disruption faced by the smartphone sector, noting that manufacturers are unable to compensate for this shortage by changing prices or products.
Leading phones are less affected by the shock
The leading phone sector has proven greater resilience, as the company has achieved "Apple" Record revenues during the first quarter of the year, supported by customers upgrading to the iPhone 17 series. Expectations indicate "Counterpoint" Apple’s 2026 shipments are expected to remain flat before rising 5% next year.
With stable chip supplies and stronger profit margins compared to many competitors, Apple is well positioned to increase its market share, and may face less pressure to raise prices.
Sales of major phone companies
The company maintained "Samsung" It expects its sales volume to stabilize in the first quarter "Counterpoint" The Korean company recorded only a 4% decrease in shipments over the year, outperforming the overall market thanks to stable supplies and a consistent product assortment.
As for the company "Transion" Which is one of the largest smartphone companies priced under $150, saw a 32% decline in its shipments this year. In return, two companies are expected to be registered "Xiaomi" and"Honor" Their two competitors, annual declines of 28% and 20%, respectively, according to data "Counterpoint."
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