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Global smartphone shipments declined 4 per cent year-on-year in the second quarter of 2026 as an ongoing memory component crisis disrupted supply chains and drove up costs, according to research from Omdia.
The downturn has created what the analyst firm describes as severe market polarisation, with Samsung and Apple growing their respective market shares while competitors focused on lower price segments lost ground.
Samsung and Apple buck the trend
Samsung held its position as the largest smartphone vendor in the quarter with 22 per cent market share, up from 20 per cent in the same period a year earlier.
The South Korean manufacturer benefited from what Omdia described as resilient demand and strong supply availability. A delayed launch of the Galaxy S26 series pushed some premium segment demand into the second quarter, while Samsung also gained ground in the budget segment as Chinese rivals pulled back by reducing product lines and increasing device prices.
Apple captured 20 per cent market share in the quarter, up from 16 per cent a year ago. Omdia noted this was a record for Apple in what is traditionally its slowest quarter. The iPhone 17 series drove a strong refresh and upgrade cycle, and Apple also benefited from stable pricing at a time when most competitors were raising theirs.
However, Omdia flagged that Apple increased pricing across other products towards the end of the quarter, raising questions about whether iPhones might face similar price hikes later in the year.
Chinese vendors under pressure
Beyond the top two, mass market segment declines squeezed multiple vendors.
Xiaomi held third place with 11 per cent market share, down from 15 per cent in the second quarter of 2025. OPPO maintained fourth position with 10 per cent share, down from 12 per cent, as it underwent restructuring to optimise its three-brand umbrella covering OPPO, realme and OnePlus. Vivo rounded out the top five with 8 per cent market share, down from 9 per cent.
The combined share held by vendors outside the top five remained flat at 29 per cent.
Memory costs reshaping the industry
The decline has been concentrated in the sub-$400 mass market segment, where supply constraints, thin profit margins and price sensitivity have converged.
Runar Bjorhovde, Principal Analyst at Omdia, pointed to the scale of the cost pressures facing manufacturers.
“To adapt, vendors are shifting their strategies from volume to value by reoptimizing portfolios and adjusting retail pricing,” Bjorhovde explained. “Managing the surging component costs is incredibly complex and unpredictable, with some vendors facing memory costing more than four to five times what they did a year ago.”
Bjorhovde noted that memory and storage now account for more than 60 per cent of the bill of materials for budget devices and more than 30 per cent for high-end models. He added that memory and storage costs are not the only challenge, with new semiconductor bottlenecks within foundries adding further cost pressures.
No near-term relief expected
Omdia’s outlook suggests the memory pricing environment will persist for some time.
Le Xuan Chiew, Research Manager at Omdia, indicated that memory price declines are expected to begin at the earliest in the second half of 2027, and that prices are unlikely to return to pre-2025 levels.
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“Smartphone vendors’ tactical adjustments should not be considered short-term response tactics but rather key permanent strategic shifts that will ensure business agility and sustainability in the years to come,” Chiew stated.
Tougher quarters ahead
Omdia expects the sharpest volume declines are still to come, with the next two quarters likely to see normal seasonal demand peaks collide with constrained memory chip supply.
“Consequently, vendors are expected to lean further into the higher price segments to capitalize on customers seeking device upgrades in 2026’s sales season,” Bjorhovde added. “However, while moving upmarket protects margins and revenue, vendors offer fewer options to budget-constrained consumers.”
Bjorhovde warned that many mass market buyers will be forced to delay purchases, downgrade expectations, use financing or opt for refurbished devices as a result of reduced availability and higher pricing at the lower end of the market.
Market share breakdown
Omdia’s preliminary estimates for the second quarter of 2026 show Samsung leading with 22 per cent market share, followed by Apple at 20 per cent, Xiaomi at 11 per cent, OPPO at 10 per cent and vivo at 8 per cent. All other vendors combined account for 29 per cent.
Xiaomi’s figures include its Redmi and POCO sub-brands, vivo’s include iQOO, and OPPO’s include realme and OnePlus.
The figures represent sell-in shipments and are preliminary estimates subject to change on final release.
Last Updated on July 13, 2026 by Nick Ross
