Counterpoint Research said on Monday that global smartphone shipments could decline by 13.9% this year to 1.08 billion units because of a worsening memory‑chip shortage. A February estimate had projected a 12.4% drop; Counterpoint says the earlier forecast was weakened further by supply disruptions linked to the Iran war.
The crisis is hitting the lower end of the market hardest: chipmakers are reallocating capacity toward chips tied to artificial intelligence, making production of entry‑level phones less economical. As a result, global wholesale prices for smartphones rose 14% in the first quarter, while shipments fell 3.1% year‑on‑year.
Counterpoint warns that as inventories deplete, this trend is likely to continue and some models priced under $150 could disappear from the market entirely. "Manufacturers of lower‑ and mid‑tier smartphones are caught between two fires. They cannot absorb the soaring costs, and consumers cannot bear higher prices," said Vang Jang, Counterpoint’s lead analyst. He added that the memory‑chip shortage is the most severe supply disruption the industry has faced, and neither repricing nor portfolio changes are sufficient to offset its effects.
The premium segment is proving more resilient. Apple reported record revenue in the first three months of the year, largely driven by users upgrading to the iPhone 17 line; Counterpoint expects Apple’s shipments to be flat this year and to grow by 5% next year. Thanks to steadier chip supply and higher margins than rivals, Apple could gain market share without being forced into major price increases.
Samsung Electronics maintained its sales volume in the first quarter; Counterpoint projects only a 4% year‑on‑year shipment decline for the South Korean firm for the full year, significantly better than the market average. By contrast, manufacturers heavily exposed to the under‑$150 segment face steep falls: Counterpoint forecasts a 32% decline for Transsion, 28% for Xiaomi, and 20% for Honor this year.
Overall, the memory‑chip shortage and the shift of production capacity toward AI chips are reshaping supply chains, lifting wholesale prices and raising the risk that the lowest‑priced smartphones will be partly or completely squeezed out of the market.
