Global smartphone shipments fell 11% in Q2 to a 13-year low as manufacturers passed on rising memory costs. Apple held iPhone prices and grew 3%. Counterpoint sees 14% full-year decline.
Global smartphone shipments fell 11% year over year in the second quarter to the lowest Q2 total since 2013. Manufacturers passed rising memory-component costs to consumers, Counterpoint Research said Monday.
Apple (AAPL) profile, the only major manufacturer that held its smartphone prices during the quarter, saw shipments rise 3%. The company also benefited from continued demand for the iPhone 17 series, the research firm said.
Memory prices kept climbing as suppliers prioritized AI data-center orders over consumer electronics, Counterpoint said. Geopolitical tensions in the Middle East, slower global growth, higher inflation and record-low consumer sentiment all weighed on demand.
“The global memory crisis has now overtaken every other factor as the single biggest drag on the smartphone industry,” Counterpoint Senior Analyst Shilpi Jain said. “What started as a components issue last year is now a full-blown demand issue.”
Jain said entry- and mid-tier devices, which account for the majority of global smartphone volumes, “become structurally unfeasible at previous price points” under the bill-of-materials pressure. That means manufacturers like Samsung, Xiaomi, Oppo and Vivo face either shrinking margins or market-share loss if they cannot absorb the costs. The premium segment, where Apple dominates, is less exposed.
The shift in memory allocation has been building for months. In January, reports showed generative AI expansion was diverting memory components that once flowed predictably into smartphones, PCs and gaming hardware toward large-scale AI systems under long-term supply agreements. At MWC Barcelona in March, the two top themes were the memory-chip shortage and the push to embed AI features into phones. Apple raised prices on Macs and iPads in June, citing component costs. iPhone prices remained unchanged.
Counterpoint expects full-year shipments to decline about 14% and the memory shortage to persist into 2027. “Overall demand recovery is unlikely until memory supply conditions improve substantially,” the firm said.
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