Rising prices push global smartphone shipments to 13-year low

Rising smartphone prices and mounting pressure on household budgets drove global shipments to their lowest third-quarter level in more than a decade, as consumers delayed upgrades and retailers became increasingly cautious about holding inventory. Global smartphone shipments fell by 20 per cent year-on-year to 254.7 million units in the third quarter of 2026, the lowest volume recorded for the period since 2013, according to research firm Omdia. The downturn comes as higher component costs feed through into device prices, making smartphones less affordable, particularly in emerging markets where consumers are more sensitive to price increases. Distributors and retailers have also become more reluctant to replenish stocks ahead of the holiday shopping season, as more expensive devices require greater working capital and increase the financial risks associated with unsold inventory. Samsung remained the world’s largest smartphone vendor, shipping 57.8 million units, down 5 per cent year-on-year. Its entry-level and mid-range Galaxy A series helped it maintain its position as competing Android manufacturers faced memory supply constraints and higher prices. The company also strengthened its presence in the premium market following the August launch of its Galaxy Z8 series, supported by trade-in and upgrade programmes. Apple shipped 56.5 million iPhones, keeping volumes broadly unchanged from a year earlier despite the wider market contraction. Demand in China and North America offset weaker performance in key emerging markets, while continued interest in the iPhone 17 and advance stocking by distribution channels ahead of expected price increases also supported shipments. In September, Apple introduced the iPhone 18 Pro, iPhone 18 Pro Max and its first foldable model, the iPhone Duo, while postponing the launch of the standard iPhone 18 until 2027. The strategy extends the iPhone 17’s sales cycle while concentrating demand for new devices on higher-priced models ahead of the holiday season. Xiaomi recorded one of the steepest declines among the leading vendors, shipping 30.7 million units, down 29 per cent year-on-year. Shipments fell by 20 per cent in China and 28 per cent in India, as the company adjusted prices across markets in response to higher component costs and prioritised protecting profit margins. The strategy had a more pronounced effect on sales volumes in price-sensitive emerging markets, with the Redmi A7 Pro and Redmi 17 providing some support but failing to offset the broader decline. OPPO, including its realme and OnePlus brands, ranked fourth with 23.4 million units shipped, a 39 per cent annual drop, while vivo took fifth place with 19.3 million units, down 33 per cent. Both manufacturers continued raising prices in their main markets to address higher component costs, making it more difficult for retailers and distributors to plan inventory. “Emerging markets, once the backbone of global smartphone volume growth, are now facing the greatest pressure from rising prices,” said Sanyam Chaurasia, principal analyst at Omdia. Africa recorded the sharpest contraction, with shipments falling by 39 per cent year-on-year, as higher costs pushed manufacturers away from aggressive expansion and market-share gains towards protecting margins and making more selective shipments, despite underlying demand. Markets across Asia-Pacific excluding Greater China, the Middle East and Latin America also recorded declines of more than 20 per cent. Currency depreciation, inflation and higher living costs have further weakened consumers’ purchasing power, prompting some to postpone upgrades or turn to refurbished devices. In lower-income markets, some consumers are being pushed towards basic feature phones instead of smartphones. North America proved more resilient, supported by its greater concentration of premium devices and established financing, trade-in and upgrade programmes offered by mobile operators. Major manufacturers are increasingly prioritising more profitable markets and their core product ranges as component supplies remain constrained. They are adjusting memory and storage configurations, reducing the number of models they offer and selectively absorbing higher costs, while expanding their higher-value product ranges to protect profitability. The pressure on prices and affordability is expected to continue into 2027, with Omdia forecasting a 12 per cent contraction in global smartphone shipments during 2026. “Further price increases and limited room for promotional discounts are expected to weigh on demand during the holiday season,” said Amber Liu, practice leader at Omdia. Manufacturers are also facing growing inventory risks as they attempt to balance existing stocks against the introduction of new generations of devices. Telecoms operators and large-format retailers are considered better placed to manage higher device prices and the additional working capital required to hold stock. Independent retailers, however, face mounting pressure from slower inventory turnover and shrinking margins, potentially accelerating their exit from the market. The global smartphone market is expected to contract further in 2027, although at a slower pace than this year. Persistent shortages of high-bandwidth memory (HBM), alongside constraints in conventional memory supplies, are expected to keep component costs elevated and limit the scope for manufacturers to reduce prices. Vendors are consequently expected to seek savings in sales, retail and marketing expenditure, while pursuing additional revenue through software, services and after-sales offerings. Strong balance sheets, lean inventory levels and operational efficiency are expected to become increasingly important competitive advantages for manufacturers and their distribution partners.