Samsung has regained its position as the world’s largest smartphone vendor after overtaking Apple in global shipments, even as the smartphone industry recorded its weakest second-quarter performance in 13 years amid rising component costs and weakening consumer demand.
According to preliminary estimates by Counterpoint Research, global smartphone shipments declined 11 percent year-on-year in the second quarter of 2026, marking the lowest April-to-June shipment levels since 2013.
The downturn was largely driven by a prolonged shortage of DRAM and NAND memory chips, which has increased manufacturing costs and pushed handset prices higher.
Despite the industry-wide slowdown, Samsung captured a 24 percent share of the global smartphone market, reclaiming the top spot from Apple.
The South Korean company benefited from strong demand for its Galaxy S26 series, improved product availability and relatively modest price increases in key markets such as India and the Middle East.
Apple, however, remained resilient against the broader market decline. The iPhone maker grew shipments by 3 percent during the quarter, lifting its global market share to a record 20 percent.
Analysts attributed the growth to sustained demand for its premium iPhone lineup and the company’s decision to hold prices steady while many competitors increased prices.
The biggest casualties were smartphone makers with a strong presence in the budget and mid-range segments. Xiaomi, OPPO and Vivo recorded the steepest shipment declines among the top five brands as surging memory costs squeezed already thin profit margins, making it difficult to absorb higher component prices.
The smartphone market is facing mounting pressure as memory manufacturers prioritise supplying high-bandwidth memory (HBM) chips for artificial intelligence data centres over conventional DRAM and NAND chips used in smartphones.
The supply imbalance has significantly increased production costs, particularly for entry-level devices.
Counterpoint Research expects the memory shortage to persist into 2027 and maintained its forecast that global smartphone shipments will decline by about 14 percent this year.
The research firm believes the budget smartphone segment will continue to bear the brunt of the downturn as manufacturers shift their focus towards higher-margin premium devices.
The latest figures highlight how the rapid expansion of artificial intelligence infrastructure is reshaping the consumer electronics market.
As chipmakers dedicate more production capacity to AI servers, smartphone manufacturers are grappling with higher memory prices that are filtering through to consumers.
For buyers, this could translate into fewer affordable smartphone options and higher retail prices over the coming months, particularly in emerging markets where demand for entry-level devices has traditionally been strongest.
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Facts Only
* Global smartphone shipments declined 11 percent year-on-year in the second quarter of 2026.
* Shipment levels were the lowest April-to-June since 2013.
* The downturn was driven by a shortage of DRAM and NAND memory chips.
* Rising component costs pushed handset prices higher.
* Samsung captured a 24 percent share of the global smartphone market, taking the top spot from Apple.
* Samsung benefited from strong demand for the Galaxy S26 series and modest price increases in key markets.
* Apple grew shipments by 3 percent during the quarter, reaching a record 20 percent global market share.
* Xiaomi, OPPO, and Vivo recorded the steepest shipment declines among the top five brands due to memory cost pressures.
* Memory manufacturers prioritize supplying HBM chips for AI data centers over DRAM and NAND chips for smartphones.
* The memory shortage is expected to persist into 2027.
* Global smartphone shipments are forecast to decline by about 14 percent this year.
Executive Summary
Samsung regained its position as the world's largest smartphone vendor after overtaking Apple in global shipments, despite the industry recording its weakest second-quarter performance in 13 years due to rising component costs and weakening consumer demand. Global smartphone shipments declined by 11 percent year-on-year in the second quarter of 2026, reaching the lowest April-to-June levels since 2013.
This downturn was primarily caused by a shortage of DRAM and NAND memory chips, which subsequently increased manufacturing costs and handset prices. Samsung managed to secure a 24 percent share of the global smartphone market by benefiting from strong demand for its Galaxy S26 series, better product availability, and manageable price increases in markets like India and the Middle East. In contrast, Apple grew shipments by 3 percent during the quarter, achieving a record 20 percent global market share due to sustained demand for its premium line and a strategy of holding prices steady while competitors raised them.
The memory shortage is further complicated by the shift in manufacturing priorities, as chipmakers allocate more capacity to high-bandwidth memory (HBM) chips for artificial intelligence data centers instead of conventional smartphone components. This supply imbalance has raised production costs, especially for entry-level devices, which analysts expect will continue to pressure the budget segment as manufacturers pivot toward higher-margin premium products.
Full Take
The narrative reveals a significant friction point between supply-side constraints driven by macroeconomic shifts and the demand structure of the consumer electronics market, which is being aggressively reshaped by the demands of the artificial intelligence infrastructure buildout. The pattern observed is that systemic resource allocation (chip manufacturing prioritizing AI data centers) creates an unavoidable cost escalation filtered down to consumers via memory shortages, disproportionately impacting lower-margin segments like budget smartphones where demand for entry-level devices historically resides.
The dynamic shift demonstrates a strategic divergence: market leaders are navigating this scarcity by leveraging premium positioning and price stability, as seen with Apple’s performance relative to Samsung. However, the vulnerability of manufacturers in the budget and mid-range segments—where profit margins are already thin—indicates that external supply shocks amplify existing structural inefficiencies rather than creating entirely new ones for those firms. This sets up a future where market leadership is increasingly defined not just by hardware access, but by the ability to manage component cost inflation within an AI-centric ecosystem.
The implication for agency is that while technology adoption accelerates due to AI expansion, the distribution of realized value remains highly unequal; high-margin premium providers maintain relative resilience, while those dependent on commodity memory face compounded pressures squeezing affordability in emerging markets. What questions remain are: how will regulatory or industrial policy adapt to decouple AI hardware demand from consumer device supply chains? And how can market structures evolve to ensure that the benefits of AI expansion do not solely exacerbate existing inequalities in access to affordable technology?