Storage chip price increases combined with the Iran war led to the global smartphone market’s first decline since 2023 in Q1.

```

The global smartphone market recorded its first year-on-year shipment decline since 2023 in the first quarter of this year. A shortage in memory chip supply and the ongoing conflict in Iran have further driven up production and logistics costs, casting a shadow over the industry's recovery prospects.

According to market research firm IDC, global smartphone shipments fell by 4.1% year-on-year in the first quarter. Apple and Samsung were the only two brands among the top five to achieve growth, each seeing shipments rise by over 3%; Huawei and Honor also saw shipment growth in the same period, while shipments of brands like Xiaomi and Oppo declined.

The IDC research team led by analyst Nabila Popal warned that the weak performance in the first quarter may be merely a "mild precursor" to pressures throughout 2026. In some emerging markets, terminal prices for phones have already increased by 40% to 50%, significantly dampening consumer demand. The shortage in memory chips is expected to persist until the second half of 2027, meaning cost pressures are unlikely to dissipate in the short term.

Another firm, Counterpoint Research, released independent data last week that also confirmed this downward trend—by their calculations, global shipments fell by 6% in the first quarter. Both agencies listed soaring memory costs as the primary reason for the shipment decline.

Comprehensive Cost Rise, Manufacturers Respond With Contraction

Thanks to their scale, each accounting for about one fifth of global shipments, Apple and Samsung are notably better at securing long-term supply agreements and managing rising costs compared to their competitors, IDC pointed out.

Apple performed particularly well in the Chinese market, with the iPhone 17 series driving its shipments in this world's largest smartphone market up by 30% year-on-year. Huawei and Honor also saw shipment growth in the same period; Honor benefited from overseas market expansion, with shipments rising by 24% year-on-year, per IDC data. Counterpoint Research ranked Apple's market share ahead of Samsung.

In addition to the sharp rise in memory chip costs, conflicts in the Middle East have further increased global shipping costs, putting mobile brands under synchronized price pressures across multiple supply chain segments. IDC's Nabila Popal stated that memory chip shortages are expected to last until the second half of 2027, requiring all manufacturers to readjust product line layouts to adapt to the high-cost environment in the long term.

Facing multiple pressures, brands are adjusting their spending strategies. Specific measures include lowering hardware specifications for certain models, cutting marketing budgets, and reducing support for channel distributors. IDC believes these measures help control expenditure but also limit market growth potential. IDC analysts predict that as these unfavorable factors persist, the global smartphone market in 2026 will continue to face pressure, and the decline in the first quarter may only be the starting point of a deeper adjustment cycle.

Risk Disclosure and DisclaimerThe market carries risks; investments need caution. This article does not constitute individual investment advice nor does it take into account the specific investment objectives, financial situations, or needs of particular users. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific circumstances. Investing based on this article is at your own risk. ```