Smartphone market faces steepest decline in history as memory chip shortage drives up prices and reduces shipments in 2026

IDC warns that the global smartphone market will experience its most significant downturn on record in 2026, with a 16.7% fall in shipments driven by memory chip shortages and rising costs, though foldable phones see promising growth due to premium demand.

IDC is warning that the global smartphone market faces a sharp reversal in 2026, with shipments set to fall by 16.7% as a shortage of memory chips pushes up component costs and retail prices. The research firm says the squeeze is already filtering through to consumers, particularly at the lower end of the market, where inexpensive handsets are becoming harder to find.

The average selling price is forecast to rise to $581 next year, up 27.6% year on year, according to IDC. The company says that price pressure is one reason shipments are expected to fall so steeply, with budget devices hit hardest as makers pass on higher memory costs. In a separate forecast, IDC said the contraction could be even deeper when wider market conditions are counted, describing 2026 as potentially the steepest annual decline in smartphone history.

One category is expected to buck the trend. IDC predicts foldable phones will grow 12.6% year on year, helped by stronger demand from premium buyers and the anticipated arrival of Apple’s first foldable iPhone, often referred to as the iPhone Ultra. Other reports, including one from MacRumors, say foldable shipments could rise by about 20% in 2026, with the fourth quarter shaping up as the key sales period.

IDC expects the weakness to continue into 2027, with shipments falling a further 2.9% before recovering in 2028. It then projects growth of 4.5% that year, followed by rises of 3.6% in 2029 and 2.8% in 2030. The firm also says foldables are likely to gain in strategic importance, with the category outpacing the wider smartphone market through 2029 and taking a growing share of market value.