Smartphone shipments fell by at least a fifth in the third quarter, preliminary estimates from two independent trackers show. IDC put the year on year decline at 22 percent and shipments at 255.3 million units, while Omdia put the decline at 20 percent and shipments at roughly 255 million, a rare agreement on the size of a consumer hardware contraction.
The cause is the same force repricing the AI buildout. Memory costs have surged by approximately 350 percent since last year, according to IDC, and are still rising, squeezing vendor margins and forcing price rises and cuts at the value end of the market where bills of materials have the least room to absorb them.
The contraction is concentrating the industry. Omdia says Samsung and Apple now account for about 45 percent of global shipments, up approximately 8 percentage points from a year ago, while price sensitive segments take the hardest hit. IDC’s Nabila Popal said the downturn the industry had braced for has materialised and that the market has not yet reached the bottom, with memory inflation slowing to a low double digit sequential rise in the quarter after jumps of 50 to 100 percent in prior quarters.
Neither tracker expects a quick turn. Omdia forecasts global shipments falling 12 percent across 2026 and a further 6 percent next year, and told The Register it anticipates no relief to the memory crisis before 2028 at the earliest, because a considerable gap between memory demand and supply remains. Vendors are already offsetting costs with cheaper display panels, sensors and radio modules, a quiet downgrading of the budget phone that buyers will feel long after the headline prices settle.