Global Smartphone Shipments Drop 20% in Q3 2026 Amid Memory Shortage

Shipments hit new low in third quarter

Worldwide smartphone shipments fell 20% in the third quarter of 2026, their lowest level since 2012, according to a new analysis by Counterpoint Research. The firm attributes the slump to the memory shortage dubbed RAMageddon, which has driven the cost of DRAM and NAND, the two main memory chips used in smartphones, computers and data centers, steadily upward. As a result, phone prices are up 20% overall this year.

The shortage stems from the massive AI infrastructure buildup and its voracious appetite for chips. Shilpi Jain, a senior analyst at Counterpoint, said the third quarter was the second consecutive one to take the full brunt of the memory crisis. Global fears about rising inflation across most products and services are also likely suppressing phone sales.

Memory supply flows to AI

Research firm Gartner has estimated that companies will spend $1.4 trillion on AI infrastructure this year, part of $2.6 trillion in overall spending. TrendForce, another research firm, said more than 70% of global memory chip production will go toward AI investment.

That leaves less memory available for device makers. Counterpoint noted that Samsung's Galaxy Z Fold 8 debuted over the summer with pricing starting at $1,900, and Apple's first foldable, the $1,999 iPhone Duo, arrives in the period's waning days, with preorders beginning Friday. Other recent introductions include Samsung's Galaxy Z Flip 8, the Google Pixel 11 and the iPhone 18 Pro line.

Market share shifts, but shipments still fall

Samsung posted a 23% market share in the third quarter, up from 19% in 2025, thanks in part to robust initial demand for the Galaxy Z Fold 8. Apple captured 22%, the first time the company has surpassed 20% in that three-month period. Despite the share gains, both companies saw a year-over-year decline in shipments.

Prices keep climbing. Earlier this month, Samsung raised prices by $100 for its Galaxy S26 phones, and Apple's new iPhone 18 Pro and Pro Max launched last month at prices set $100 above the previous generation.

Consumers wait, or walk away

Paolo Pescatore, a TMT analyst, said shoppers will be cautious about buying the latest smartphones because of higher prices. New design features, including foldables, may generate excitement and appeal, but their steep price premiums remain hard to justify when most people want a device that delivers robust, reliable connectivity, he said. For many consumers, he added, the question is straightforward: why replace a perfectly functioning smartphone that continues to meet their everyday needs?

A Counterpoint survey spanning the US, UK, India, China and Germany found that half of respondents would wait until holiday sales to buy a new phone, a figure that rises to 56% among Gen Z consumers. Jain said shoppers are increasingly looking at refurbished devices and prioritizing higher-value devices. Pescatore said phonemakers might respond with refurbished handsets, repairs and trade-in schemes, while carriers such as T-Mobile, Verizon Wireless and AT&T could use financing plans and bundled services as enticements.

With AI investment continuing to absorb memory supply, Counterpoint said phone prices are unlikely to fall anytime soon, and the industry's focus on premium devices could mean fewer budget alternatives for customers.

Sources: Cnet · Counterpoint Research · 9To5Mac