The global smartphone market contracted by 7 percent year-on-year in the second quarter of 2026 as rising memory chip prices pushed consumer costs higher worldwide.
Shipment volumes also fell by 3 percent compared with the first quarter of the year, according to data from research and consulting firm FDM CCS Insight, originally reported by technology outlet GSM Arena. Analysts now forecast that total global shipments will decline by approximately 12 percent by the end of 2026.
The drop in demand has affected regions unevenly across the globe. Developing nations recorded the steepest declines as buyers responded to higher retail prices, whereas market contractions in Europe and North America were significantly more moderate.
Rising prices and memory chip shortages
A severe shortage of memory microchips has emerged as the primary driver behind the downturn, forcing manufacturers to increase retail rates. Average smartphone prices rose by roughly 13 percent during the second quarter alone, with experts warning that prices will continue to climb through the second half of 2026.
Memory microchips, including dynamic random-access memory, are core hardware components that allow mobile devices to run operating systems, store active data, and process applications. When global chip supplies tighten, component costs rise quickly for hardware makers, who then pass those expenses on to consumers.
Industry warnings about chip supply constraints had already surfaced earlier in the year. Reports published in February 2026 indicated that smartphone prices were expected to jump by 14 percent over the course of the year due to the ongoing memory deficit, although graphics card manufacturer Sapphire suggested that memory chip prices might begin to ease within six months.
Growing demand for refurbished devices
As prices for brand-new models climb, cost-conscious buyers are increasingly choosing refurbished smartphones instead. Sales of refurbished devices have already surpassed their levels from the previous year, and analysts expect this market segment to grow by nearly 10 percent by the end of 2026.
Refurbished smartphones are previously owned handsets that have been inspected, repaired, tested, and restored to full working order before being resold. They offer budget-focused consumers access to modern mobile technology at lower price points than new store inventory.
However, the surge in consumer interest is creating new supply pressure in the second-hand market. Strong demand combined with limited device availability is now gradually driving up resale prices for used electronics as well.
Industry analysis and market background
FDM CCS Insight is an international research and advisory firm that tracks developments in telecommunications, digital infrastructure, and information technology markets. GSM Arena is an online technology publication providing mobile device news, specs, and market analysis.
With memory supply bottlenecks expected to persist into the final months of the year, industry analysts anticipate that high device prices will continue to shape consumer purchasing habits across both new and refurbished smartphone sectors.
