Rising memory prices are reshaping expectations for the global smartphone market, prompting analysts to lower shipment forecasts for next year. Contrary to its earlier prediction of flat growth, Counterpoint Research now predicts a contraction in the market in 2026.
Smartphone Market Outlook Revised
Counterpoint said it now forecasts global smartphone shipments to decline by 2.1% in 2026. The company anticipates that RAM prices will continue to rise sharply in the coming months, which led to the revision.
Memory prices could also rise by a further 40% through the second quarter of 2026.
The higher component costs are already affecting smartphone manufacturing economics. The bill of materials for low-end smartphones is currently about 25% higher than at the start of the year.
Mid-range devices have seen cost increases of around 15%, while high-end models are facing roughly 10% higher component costs. Bills of materials could rise by 8% to 15% more overall if the forecast for the second quarter holds.
Impact on Smartphone Makers
The majority of major brands’ smartphone shipments will now be lower, according to Counterpoint. In 2026, shipments for Oppo and vivo were anticipated to rise, but the revised outlook indicates that they will fall. Xiaomi and Honor are expected to see larger declines than previously anticipated, with Honor facing the steepest downward revision.
It is anticipated that Samsung and Apple will also feel the effects of rising costs, albeit to a lesser extent. Senior Analyst Yang Wang said Apple and Samsung are better positioned to manage the next few quarters compared with smaller rivals, particularly those with limited flexibility to balance market share and profit margins. He added that the pressure will be most visible among Chinese smartphone brands as the year progresses.
Cost Pressures Drive Hardware Degradation
By reorganizing their product lines, smartphone manufacturers are already adjusting to higher component costs. Senior Analyst Shenghao Bai said some manufacturers have begun downgrading specifications in certain models.
These changes include lower-end camera modules, the removal or simplification of periscope camera systems, reduced display quality, changes to audio components, and smaller memory configurations.
Higher Prices Expected for Consumers
Counterpoint also revised its forecast for average selling prices (ASPs) in 2026. The firm now expects ASPs to rise by 6.9%, up from an earlier estimate of 3.9%.
According to analysts, this may cause manufacturers to encourage consumers to purchase more expensive models, where memory costs make up a smaller portion of the overall bill of materials.
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