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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