Market Decline
While hype levels seem off the charts for the new iPhone 18 Pro and especially the iPhone Duo, the sales figures for smartphones overall are looking pretty ugly.
According to new IDC market research, smartphone sales dropped by a staggering 22% YoY in the third quarter of 2026. That's the largest drop it has ever recorded. This is due to the ongoing RAM crisis and rising prices from all the major vendors.
However, the worst is yet to come, said Nabila Popal, senior research director for Worldwide Devices, IDC.
Smartphones shipments: What the numbers show
IDC blames an AI-led memory crisis that continues to disrupt the market with escalating component costs and strained supply. Current indicators suggest that the market has not yet reached the bottom. Memory costs have surged approximately 350% since last year and are still rising, creating substantial pressure on vendor margins and shipments, continued Popal.
IDC says we won't see any recovery from the strained market until at the earliest in 2028.
Unfortunately, it's consumers who will start to feel the pinch going forward. The third quarter shows the full impact and damage of the memory crisis, said Francisco Jeronimo, vice president for Worldwide Devices, IDC. The pressure is now moving from vendors to consumers.
As a result, smartphone owners are deciding not to upgrade as often, and the situation isn't helped by the fact that most the upgrades being offered right now are iterative. As higher prices reach the shelf, many buyers are keeping their current devices longer, said Jeronimo in IDC's analysis.
It's a nightmare scenario for consumers who are forced to pay top dollar for smartphones, and it's not much better from a vendor perspective, as falling sales are never something they want to see.
But there doesn't seem to be an obvious solution, either. Despite the sluggish sales, some vendors raised production plans ahead of an expected tightening in component supply next year. If demand remains weak, this could lead to inventory build-up heading into 2027, adding a further downside risk to our 2027 forecast, noted Jeronimo.
Consumer Impact
At the end of the day, prices are rising for anything that uses memory. The iPhone 18 Pro and iPhone 18 Pro Max just got a $100 price hike, and Samsung also just raised prices on the Galaxy S26 lineup.
If you see a good deal on a smartphone and yours isn't holding up, jump on it. That's the best advice we can offer during these unprecedented times. Based on this IDC analysis, we could be looking at 2028 before things stabilize.
