Sub-$400 Smartphones Face 22% Slump as Apple, Samsung Lift Combined Share to 42%
Updated
Updated · Computerworld · Jul 13
Sub-$400 Smartphones Face 22% Slump as Apple, Samsung Lift Combined Share to 42%
3 articles · Updated · Computerworld · Jul 13
Summary
Omdia forecasts a 22% decline in the sub-$400 smartphone segment as Apple and Samsung widen their lead while overall smartphone sales fall about 4% on average.
DRAM prices have risen four- to fivefold in some cases, and memory plus storage now account for more than 60% of a low-end phone’s cost, crushing margins for smaller vendors.
Apple and Samsung gained share versus 2Q25—up 4% and 2% respectively—helped by scale that secures better component pricing while smaller rivals face steep volume declines and potential M&A pressure.
Rising foundry bottlenecks and Apple’s push into lower price tiers with the iPhone e series are expected to keep average smartphone selling prices climbing over the next 12 months.
OpenAI’s planned 2027 AI hardware could add another buyer for the same memory and processors, intensifying component inflation and further squeezing weaker smartphone makers.
Beyond Apple and Samsung, which brands can survive by innovating around the memory crisis, not just raising prices?
As the AI boom makes cheap smartphones extinct, how will developing nations bridge the growing digital divide?
With a helium crisis crippling chip production, which nations will control future semiconductor supply chains?
2026 Smartphone Shipments Drop 12.9% Globally as AI Demand Triggers Memory Crisis and Market Polarization
Overview
In early 2026, the global smartphone market faced an unprecedented decline, with shipments dropping 4.1% year-on-year to 289.7 million units. This downturn was mainly driven by a memory supply shortage and surging component prices, which raised production costs for manufacturers. As a result, device prices increased, leading to weaker consumer demand worldwide. Consumers became more cautious with their spending, especially in major markets like India, where demand was further slowed by seasonal factors. These challenges mark a sharp reversal from years of growth, signaling a tough period ahead for both manufacturers and buyers.