Huawei bucks China’s smartphone slump as memory costs push prices higher

China’s smartphone shipments fell 15.4% in the third quarter as soaring memory prices, higher retail costs and longer replacement cycles weakened demand, while Huawei gained share.

China’s smartphone market weakened sharply in the third quarter of 2026 as rising component costs and higher retail prices continued to suppress demand. IDC’s latest quarterly tracking data show shipments of about 57.9 million units, down 15.4% from a year earlier, extending a downturn that the research firm says is now being driven less by supply constraints than by weaker consumer appetite and longer replacement cycles. IDC said the market is now showing a clear pattern of falling volumes and rising prices, as vendors adjust product configurations to offset cost pressure.

The strain has been particularly visible in the lower and mid-tier segments, where memory prices have risen steeply and now make up a much larger share of the bill of materials. IDC’s broader market commentary points to memory costs increasing by nearly 300% from a year earlier in the global market, with low-end devices especially exposed to the increase. As a result, manufacturers have been forced to raise prices and trim specifications, a combination that has made it harder to sustain demand. IDC said this has slowed replacement demand and weighed on the performance of Android-focused brands and smaller players.

Huawei was the clear outlier among the leading vendors. According to IDC, it was the only top brand to post double-digit year-on-year growth in the quarter, lifting its market share to 21.1%. The company has benefited from a broad product range and relatively restrained price increases compared with rivals. Reuters-style market summaries based on the same IDC data also show that Huawei shipped about 12.2 million units in the quarter, underlining its continuing strength in the domestic market.

Apple also held up better than the broader market, although its own shipments still slipped modestly. IDC-linked reports indicated that the company raised its share of the Chinese market to 17.8% in the quarter, helped by stronger-than-expected reception for its latest launches. Even so, Apple shipped 4.3% fewer units than a year earlier, in part because it offered fewer models than in previous cycles. Other leading Chinese brands remained under pressure, though Honor was said to have been the only one among the top vendors to post a slight quarter-on-quarter increase.

Looking ahead, IDC expects the market to remain weak through the fourth quarter of 2026 and into much of 2027 if memory and other parts costs stay elevated. The firm believes that most consumers will need more time to absorb the new pricing environment before replacement demand improves. That suggests the near-term outlook will continue to favour vendors with strong brands and pricing power, while smaller companies and those concentrated in cheaper handsets may face a prolonged period of margin and volume pressure.