Global smartphone shipment expectations for 2026 have been revised downward as memory shortages push component costs materially higher across all price tiers. According to Counterpoint Research, rising DRAM prices have already lifted bill of materials costs by roughly 25% at the low end, 15% in the mid-range, and 10% at the high end, with further increases of 10% to 15% expected through Q2 2026.
Shipments revised lower globally
These cost pressures are translating into weaker unit demand. Global smartphone shipments are now forecast to decline by 2.1% in 2026, representing a 2.6 percentage point downward revision from earlier expectations. Chinese OEMs including HONOR, OPPO, and vivo account for the largest reductions as their exposure to lower price bands limits pricing flexibility.
Prices rise as portfolios shift
OEMs are responding through cost pass through and portfolio restructuring. Average selling prices are now expected to rise 6.9% year on year, nearly double earlier projections. In the sub € 200 segment, rising costs are increasingly unsustainable, prompting manufacturers to reduce volumes of entry level models and rebalance toward higher margin devices.
Strategic advantages concentrate
Scale and vertical integration are becoming decisive advantages. Vendors with broad portfolios and premium exposure are better positioned to absorb component inflation while protecting margins. Others are deploying mitigation strategies such as reusing older components, downgrading specifications, and pushing consumers toward higher storage or Pro variants to preserve profitability.
Secondary demand accelerates
The resulting price inflation in the primary market is reshaping demand flows into the secondary ecosystem. As new smartphones become less affordable, price sensitive buyers are increasingly extending device lifecycles or turning to refurbished alternatives. Research from Recommerce and Kantar shows affordability remains the dominant purchase driver, supporting near term volume growth across refurbishment and resale channels.
Supply tightness follows demand
However, the uplift for the secondary market is structurally constrained. Reduced shipments today translate into tighter future supply of recoverable units. At the same time, higher original selling prices feed through into elevated trade in expectations, gradually pushing up acquisition costs for refurbishers and distributors worldwide.
Longer term circular implications
Over the medium term, higher memory pricing driven by AI related demand reinforces the strategic relevance of circular models while raising execution requirements. Growth will depend on efficient sourcing, accurate grading, and rapid inventory turnover as pricing pressure builds across both primary and secondary markets. The current cycle highlights how upstream cost shocks increasingly shape downstream circular economics.
Market
Trade-in
Repair
Refurbishing
