Storage chip price surge drags down demand! Global smartphone shipments hit Q2 thirteen-year low

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AI data centers are seizing storage resources, and the mobile phone industry is paying the price.

The global smartphone market suffered a major setback in Q2 2026. According to preliminary data released by Counterpoint Research on July 13, global smartphone shipments in Q2 fell by 11% year-on-year, marking the lowest second-quarter level since 2013.

The root cause of this decline points to the same behind-the-scenes driver: storage chips. Prices of DRAM and NAND have continued to soar, directly pushing up material costs for phones, with manufacturers passing pressure onto consumers, hitting entry-level and mid-range models first and hardest.

The market landscape has thus diverged. Samsung has regained its global top spot, Apple's market share has reached a new quarterly high, while several other mobile brands have suffered the most severe shipment declines.

Storage Crisis: From Component Issue to Demand Crisis

To understand this downturn, we first need to understand the logic of storage chips.

DRAM and NAND are core components of smartphones, equivalent to the "memory" and "hard drive" of a phone. Over the past year, demand from AI data centers for storage chips has exploded, prompting suppliers to prioritize capacity for the more profitable data center customers, thereby tightening supply on the consumer electronics end and causing prices to rise continuously.

Cost pressure has been transmitted down the supply chain: manufacturers' BOM (bill of materials) costs have risen, forcing them to raise retail prices, especially for price-sensitive entry-level and mid-range models. These models constitute the majority of global smartphone shipments.

Counterpoint Senior Analyst Shilpi Jain said bluntly: "The global storage crisis has now surpassed all other factors to become the single largest drag on the smartphone industry. Last year, it was just a component issue; now it has developed into a comprehensive demand crisis."

She further pointed out that entry-level and mid-range devices are now "structurally unviable at existing prices." Faced with this predicament, manufacturers have adopted different strategies: some have chosen to raise prices and absorb profit pressure, some have extended the lifecycle of older models and used promotions to retain budget-conscious buyers, while others have directly slashed new product launches and production plans.

To make matters worse, geopolitical tensions in the Middle East have pushed up oil and shipping costs, further raising phone prices. At the same time, the global economic slowdown, high inflation, and plunging consumer confidence have taken a direct toll on price-sensitive buyers.

Samsung Retakes Top Spot, Apple Reaches Record Market Share

In the overall declining market, the performance of leading brands has diverged significantly.

Samsung regained its global No.1 position with a 24% market share, and among the top five brands, had the highest year-on-year growth. The main driver was the ramp-up of the Galaxy S26 series, with the Ultra version performing particularly well, earning market recognition for its privacy display and AI functions. Samsung performed relatively well in India and the Middle East, benefiting from better product supply, fewer price hikes, and active summer promotions. Its vertical integration advantage and expanded AI product lineup also helped it maintain growth in a weak entry-level and mid-range environment.

Apple achieved 3% year-on-year shipment growth, and a Q2 market share of 20% for the first time. Notably, Apple was the only major brand that did not raise smartphone product prices this quarter. The iPhone 17 series continued to sell well, maintaining the position of the world's highest-shipping model. However, shipments in China still declined year-on-year.

Counterpoint also noted that Apple is expected to raise prices with the launch of the next-generation iPhone this fall.

Significant Shipment Declines for Other Manufacturers

Several smartphone brands recorded double-digit year-on-year shipment declines, the steepest among the top five brands.

Xiaomi maintained its shipment levels through streamlining its product portfolio and easing financing terms for retailers, ultimately retaining a 12% market share. On the high end, the Redmi Note 15 series, Redmi K90, and Xiaomi 17 series contributed some incremental gains.

OPPO and vivo ranked fourth and fifth, with market shares of 11% and 8%, respectively.

In addition, Google and Huawei achieved counter-trend growth, with Q2 shipments rising 16% and 6% year-on-year, respectively. Google’s growth was driven by the Pixel 10 and 10a in mature markets, while Huawei grew through the Mate 80 series, Nova 15, and the newly launched Enjoy 90 series.

Full-Year Outlook: Decline of 14%, Recovery a Long Way Off

Counterpoint's outlook for all of 2026 is not optimistic.

The firm maintains its prediction of a roughly 14% decline in global smartphone shipments for the year, and expects the global storage shortage to continue through 2027.

Against this backdrop, manufacturers' strategies are expected to shift further toward "emphasizing value, de-emphasizing shipment volume": cutting low-margin models, adjusting specs and storage configurations, and increasing the proportion of refurbished and previous-generation devices to retain budget-conscious buyers. The premiumization trend is expected to remain relatively resilient for the year, with installment payments, ecosystem stickiness, and AI-powered retail experiences acting as supporting factors.

But Counterpoint's conclusion is clear and direct: "Until there is a significant improvement in storage supply, an overall demand recovery is unlikely."

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