Earlier today, we looked at data from Counterpoint indicating a massive 11% plunge in global phone shipments. Now, a new report from Omdia presents a slightly different angle on the market squeeze. Omdia researchers estimate that global shipments fell by just 4% year over year. While the estimated drop is smaller, the underlying reason remains identical. A massive memory chip shortage is wreaking havoc on supply chains and pushing component prices through the roof.
Samsung managed to hold onto the top spot, claiming 22% of the global market. They actually grew their share by 2 percentage points compared to last year. Part of this success comes down to timing. Because the launch of the Galaxy S26 series was delayed, premium demand spilled directly into the second quarter. Samsung also capitalized on the budget market. Their Chinese competitors pulled back, cutting product lines and raising prices to cover their own costs.
Apple walked away with its best second quarter on record. They captured 20% of global shipments, which is a 4 percentage point increase over the previous year. Upgrades for the iPhone 17 series were massive. Apple also managed to keep its iPhone prices flat while competitors had to raise theirs. The real test comes later. Since Apple raised prices on other hardware late in the quarter, we might see iPhone price hikes later this year.
Outside the top two, the mass market is shrinking. Xiaomi kept its 3rd place position with 11% of the market. Oppo held 4th place at 10% while working to restructure its three brand portfolio. Vivo took 5th place with 8% of shipments.
The cheapest phones are taking the hardest hit. Runar Bjorhovde, a principal analyst at Omdia, pointed out that the steepest drops are happening in the segment under 400 dollars. In this space, profit margins are paper thin. Bjorhovde explained the situation directly:
The steepest volume drops hit the mass market segment under 400 dollars, where supply constraints are tightest, profit margins are slimmest, and price sensitivity is highest.
Memory and storage now make up over 60% of the cost to build a budget device, and about 30% for premium models. Some companies are paying 4 to 5 times more for memory than they did a year ago. Foundry bottlenecks are making things even worse.
Do not expect a quick fix. Omdia research manager Le Xuan Chiew warned that memory prices will not start dropping until the second half of 2027 at the earliest. Even then, they will not fall back to where they were before 2025. Chiew noted that tactical shifts by manufacturers are not temporary, but represent key permanent strategic shifts that will ensure business agility and sustainability in the years to come.
This means budget buyers are out of luck. Prices are soaring. Many consumers will have to buy refurbished gear, use payment plans, or just wait to upgrade. The upcoming holiday shopping seasons will likely bring even sharper volume declines as seasonal demand peaks collide with limited chip supply.
