Hang up the bargain bin — the smartphone industry is about to ring in its worst year ever. Counterpoint Research now expects global shipments to fall 13.9% in 2026 as a worsening memory chip shortage collides with disruptions from the Iran war. With chipmakers prioritizing AI accelerators, low-cost smartphones are becoming harder to build profitably.

• Lower-end brands are taking the hit, with Transsion’s shipments expected to fall 32% and Xiaomi and Honor facing declines of 28% and 20%.
• At the premium end, AppleAAPL
  generated nearly $57B in iPhone sales last quarter, while SamsungSSNLF
  led smartphone sales across several emerging markets in Q1.

Market shakeout: Samsung’s Kim Jaejune warned that “the supply-to-demand gap for 2027 is set to widen even further than in 2026,” a troubling sign for budget phone makers already struggling with rising costs and shrinking margins. As Counterpoint’s Wang Yang put it, “The question is no longer how to grow shipments or market share, but whether to remain in the market at all.”