The most miserable year in the history of the mobile phone industry: Expensive memory, rising oil prices, and longer consumer replacement cycles—who can withstand it?

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The global smartphone industry is heading toward the most severe annual contraction in history. Amid deepening difficulties in the overall market, Apple is demonstrating remarkable resilience thanks to its forward-looking strategy.

According to the latest forecast from market research firm IDC, global smartphone shipments in 2026 will decline by 14% year-on-year to 1.09 billion units, a further deterioration from the 12.9% decrease predicted by the agency in February this year. If realized, this will set a record for the largest annual contraction in the industry’s history. Meanwhile, IDC has narrowed its expectation for Apple’s iPhone annual shipment decline from 8.1% to 5.2%, whereas Android phone shipments may face a year-on-year drop as steep as 20%.

This industry downturn has been driven by multiple factors: the construction of artificial intelligence data centers has consumed memory resources and pushed up the cost of key components; in addition, the escalation of oil prices and transportation costs due to the U.S.-Iran conflict has put smartphone manufacturers under dual pressure. IDC data shows that these pressures are pushing the average global smartphone selling price to a record high of $550, up $100 from last year.

Record Contraction: AI Competes for Memory, Forcing Manufacturers to Raise Prices and Cut Shipments

IDC’s latest report shows that the 14% drop in global shipments will surpass any previous annual record of industry recession. One of the main drivers is that demand for key components such as memory, fueled by the buildout of artificial intelligence infrastructure, has far outstripped supply, resulting in global shortages and soaring memory costs. While this benefits memory chip manufacturers like Micron Technology, it becomes a significant headwind for smartphone makers.

Faced with mounting costs, manufacturers generally choose to reduce shipments, raise prices, and concentrate resources on high-end product lines. On the demand side, lengthening replacement cycles by consumers is another factor — with device prices rising steadily, more users are choosing to delay upgrades. IDC data shows that average smartphone prices have hit a historical high of $550, a $100 increase within one year.

War Premium: U.S.-Iran Conflict and Higher Transport Costs Add Persistent Pressure

In addition to memory shortages, geopolitical risks have become a new variable for the industry. Nabila Popal, IDC’s senior research director, wrote in the agency’s latest report: "The U.S.-Iran war has brought a new round of cost pressures for smartphone OEMs, mainly reflected in rising oil prices and increased transportation costs." She pointed out that this pressure, combined with soaring memory costs, is forcing manufacturers to further cut shipments, raise prices, and shift their focus to higher-priced models.

Nabila Popal said that multiple factors have collectively pushed the average smartphone price to a record $550, up $100 from last year.

Apple’s Three Trump Cards: Securing Supply, Penetrating China, and Precise High-End Positioning

In the context of overall industry pressure, Apple stands out in the competition thanks to its forward-looking preparation. Francisco Jeronimo, IDC’s Vice President of Global Client Devices, said: "Apple has accomplished three things few competitors can do: securing memory supplies in advance, building a product portfolio attractive to the Chinese market, and precisely positioning the iPhone 17 to meet mature-market consumers’ demand for longer replacement cycles and premium upgrades."

Looking ahead to the second half of the year, Apple still holds several potential catalysts. Analysts expect Apple to unveil much-anticipated AI feature updates at its annual Worldwide Developers Conference opening June 8; meanwhile, a high-end foldable iPhone is also expected to launch later this year. Strong demand for high-performance AI capabilities, alongside hardware innovation, is expected to attract new users and encourage existing users to upgrade their devices ahead of schedule.

Risk Warning and DisclaimerThe market entails risks; investors should exercise caution. This article does not constitute personal investment advice and does not consider the specific investment objectives, financial situation, or needs of any particular user. Users should consider whether any opinions, views, or conclusions in this article fit their individual circumstances. Investment based on this is at your own risk. ```