Global smartphone shipments dropped 6% year on year to 272 million units in the second quarter of 2026, as soaring memory costs squeezed vendors and pushed up device prices, according to research firm Omdia.
According to Statista, demand for smartphones in SA is growing rapidly due to increased access to mobile internet and the need for affordable communication options.
In January, Counterpoint research director Tarun Pathak warned that rising memory costs and supply constraints would put pressure on the global smartphone market in 2026.
“Price hikes in smartphones have already begun to surface. Against this backdrop, we have revised our forecast for 2026 by reducing shipment estimates by 3%,” he said.
The 6% decline, according to Omdia, follows stronger-than-expected demand in the first quarter, with the market now entering an adjustment phase as vendors contend with rising memory costs.
The research firm said the pressure has affected vendors differently, with scale, supply chain resilience, pricing power and exposure to the entry-level segment emerging as key factors shaping performance.
According to the report, Samsung remained the world's largest smartphone vendor, shipping 60.5 million units in the quarter – up 5% year on year – giving it a 22% market share.
Omdia said Samsung's vertically integrated memory business helped it manage component shortages more effectively than some competitors. The delayed launch of its Galaxy S26 series also shifted some premium demand into the second quarter.
The company also gained share in the entry-level segment as Chinese competitors cut back their product ranges and increased prices.
Apple shipped 55.1 million iPhones in the quarter, up 23% year on year, giving it a 20% market share – its strongest second quarter on record.
Omdia attributes the performance partly to higher channel inventories of the base iPhone 17 model ahead of expected price increases, and expectations that the upcoming iPhone 18 range could launch at higher prices.
Apple has largely maintained iPhone prices despite wider industry price increases, although price adjustments across other product categories in the second quarter could increase the likelihood of higher iPhone prices later this year, according to Omdia.
Xiaomi remained in third place, but shipments fell 26% to 31.2 million units – its second consecutive quarterly decline.
More than half of Xiaomi's shipments are priced below $200, leaving the company particularly exposed to rising memory costs in emerging markets in Asia-Pacific and Latin America, where higher device prices have weighed on demand.
Oppo, including its realme and OnePlus brands, ranked fourth with 28.4 million shipments, down 17% year on year. The company has reduced entry-level models and streamlined its three-brand portfolio as it seeks to improve profitability.
Vivo completed the top five with 21.5 million shipments, down 18% year on year.
The research also highlights that the market's performance in the first half of 2026 reflects a broader shift in vendor priorities, as rising costs for memory, storage and application processors push manufacturers to focus less on shipment volumes and more on margins and average selling prices.
Vendors have responded by passing some higher component costs on to consumers, reducing their exposure to the entry-level segment and placing greater emphasis on mid-range and premium devices. This has helped keep industry revenue relatively resilient despite weaker shipment volumes.
Regional factors have also weighed on the market. Smartphone shipments in the Middle East fell 18% year on year, with geopolitical tensions disrupting supply chains, retail activity and consumer demand. Omdia expects these disruptions to be temporary, with market conditions likely to stabilise in the second half of the year.
“Price is once again becoming a competitive differentiator. The current memory cost cycle is driving a structural repricing of the industry, creating a lasting shift in how vendors compete on pricing, profitability and product positioning,” said Le Xuan Chiew, research manager at Omdia.
Omdia expects elevated component costs to continue weighing on the smartphone market for the rest of 2026, despite channel inventories having largely normalised.
The pace of shipment declines is expected to moderate following the sharp correction in the second quarter, but a broad-based recovery is unlikely until component costs begin to ease.
Vendors are also expected to increasingly use device financing, trade-in programmes and bundled offerings to offset higher upfront prices, while expanding services revenue.
“Despite seasonal demand from flagship launches, holiday promotions and shopping festivals, smartphone shipments are expected to continue declining over the next two quarters amid persistent cost pressures,” said Amber Liu, practice leader at Omdia.
“The winners will be vendors that combine pricing power, supply chain resilience and innovative commercial strategies to drive profitability, deepen customer relationships and emerge stronger as the market resets.”
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