Global smartphone shipments are expected to decline 2.1% next year as rising chip costs are likely to impact demand, technology-focused market research firm Counterpoint said on Tuesday.
Electronics supply chains around the world have been hit by a shortage of legacy memory chips in recent months as manufacturers turned their focus to high-end memory chips suited for semiconductors designed for AI applications.
What we are seeing now is the low end of the market (below $200) being impacted most severely, with bill-of-materials costs (total cost of parts) increasing by 20% to 30% since the beginning of the year, Counterpoint's Research Director MS Hwang said.
Chinese Smartphone brands such as Honor Device and Oppo are expected to be more vulnerable, particularly in the entry-level segment, due to tight margins, the report said.
"Apple and Samsung are best-positioned to weather the next few quarters," Counterpoint senior analyst Yang Wang said.
The research firm said last month that Nvidia's move to use smartphone-style memory chips in its artificial intelligence servers could cause server-memory prices to double by late 2026.
As each AI server needs more memory chips than a handset, the change is expected to create sudden demand that the industry is not equipped to handle, according to Counterpoint.
Earlier this month, research firm IDC also said it expects a decline of 0.9% in 2026 smartphone shipments globally, citing rising memory chip prices.
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