Smartphone shipments fall by a fifth as memory costs squeeze affordable phones

The latest smartphone shipment estimates describe a much smaller market, even as manufacturers introduce some of their most expensive phones. IDC puts the third-quarter decline at 22% year on year; Omdia and Counterpoint each estimate 20%. All three point to pressure from memory costs and supply, with the damage falling unevenly across brands and price segments.

These are preliminary shipment estimates for July through September, not a count of purchases made by consumers this week. That distinction matters when placing them alongside October launch coverage: an exciting new product and a contracting distribution market can coexist.

Three trackers, one clear direction

IDC’s October release estimates 255.3 million new smartphones shipped in Q3, down from 327.3 million a year earlier. Its figures exclude refurbished units. The company calls this the largest year-on-year quarterly decline in its records and attributes the contraction to the AI-driven memory supply crunch and rising component costs.

The vendor breakdown illustrates why a higher market share is not necessarily growth:

Source: IDC’s preliminary Q3 estimates. Company groupings follow IDC’s definitions.

Samsung and Apple lost shipment volume but declined less sharply than the overall market. Their shares therefore increased. Reading those share gains as evidence that more people bought their phones would reverse the meaning of the underlying numbers.

Why the affordable end is exposed

Omdia’s October 15 assessment places Samsung and Apple at a combined 45% of shipments. It argues that vendors are becoming more selective about low-margin devices as memory and storage costs restrict their room to price competitively.

For a low-cost phone, an increase in the bill for essential components leaves a difficult choice. A manufacturer can accept less margin, raise the retail price, reduce other specifications or ship fewer units. None automatically preserves the reason a customer chose that price bracket in the first place. A premium model has more room to absorb a component increase in absolute currency terms, although that does not make it immune.

Omdia also warns that retreating from markets carries a cost beyond the current quarter. Distribution relationships and visibility take time to establish. Cutting shipments can protect a margin today while making it harder to win customers when conditions improve.

That is a more useful way to read the market than treating every premium launch as proof that demand is healthy. The products attracting attention are not necessarily representative of the phones most affected by rising costs.

Keeping a phone longer changes what the figures capture

Counterpoint’s preliminary report describes the lowest third-quarter shipment level since 2012. Its analysts report that consumers are keeping devices longer and increasingly considering refurbished phones. It also estimates that global smartphone retail prices have risen 20% so far in 2026.

Those behaviors help explain why a fall in new shipments does not mean an equivalent fall in the number of people using smartphones. A working phone retained for another year still provides access to apps and services. A refurbished replacement can meet a need without appearing in a tracker’s new-device total.

Counterpoint has revised Xiaomi’s share from 10% to 12%, a reminder that these early estimates can change. Its current figures should not be spliced into IDC’s table as though the two datasets were one measurement.

Recent Xiaomi coverage and OPPO’s forthcoming global launch show the innovation happening at the expensive end of the market. The shipment reports raise a different question: how much choice remains for the customer whose budget has not grown with component prices? A market can deliver ambitious flagships while becoming less accommodating to everyone else.