Smartphone shipments fell by roughly a fifth in the third quarter as the AI-driven memory shortage pushed component costs to new highs. Preliminary figures from IDC and Omdia put the year-on-year decline at 22 percent and 20 percent respectively, with both tracking close to 255 million units shipped. IDC estimates memory costs have surged about 350 percent since last year, and although the pace of quarterly inflation slowed to a low double-digit increase, prices are still rising.
Omdia says the shrinking market has strengthened the position of Samsung and Apple, which now account for about 45 percent of global shipments, up about 8 percentage points from a year ago. More price-sensitive buyers are bearing the brunt, and vendors are responding by raising prices, cutting value-end devices, and substituting cheaper display panels, sensors, or RF modules. Both firms warn the downturn is not over: Omdia forecasts global shipments to fall 12 percent in 2026 and another 6 percent in 2027, while IDC says the market has not yet bottomed.
The two research firms differ slightly on the exact decline but agree there is little prospect of relief before 2028. Omdia's Runar Bjorhovde said the first sign of improvement would be memory pricing stabilizing, and that has not happened. IDC expects a lasting shift toward higher costs, and says vendors that adapt their products and pricing will be best placed to gain share when conditions eventually ease.