Global smartphone shipments hit a 14-year low in Q3 amid a memory shortage

The smartphone industry is experiencing the most challenging period in 14 years as soaring memory chip costs and supply shortages impact production expenses, forcing manufacturers to raise retail prices. According to Counterpoint Research, global smartphone shipments dropped by 20% compared with the same period last year, reaching their lowest level for a third quarter since 2012.

The decrease in shipments is attributed to rising memory chip prices and shortages. Smartphones run on memory chips to store and process data, but the majority of these chips are used by technology companies to build more AI data centres. As a result, the strong demand is putting pressure on supply and contributing to higher prices for memory components used across the electronics industry.

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Reuters quoted Counterpoint senior analyst Shilpi Jain, who said, “Consumers are holding on to ​their devices longer than estimated, increasingly considering refurbished devices and prioritizing higher-value devices.”

Samsung and Apple lead a troubled market

As per the report, Samsung remained on top with a 23% share in the global smartphone market. Demand for its Galaxy Z Fold8 series and steady availability of components for its mid-range phones helped it maintain its lead. However, its shipments fell 3% compared with the same quarter last year.

Apple captured 22% of the global market, crossing the 20% mark for the first time in a third quarter. It was highlighted that Apple shipped fewer iPhones to retailers amid its new-generation model launch. In addition, since Apple did not launch the standard iPhone 18 model, its launch-month shipments to retail partners were lower than a year earlier, when the full iPhone 17 lineup was available.

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 OPPO and vivo experienced a major decline this quarter as both brands recorded shipment drops of more than 20% year-on-year. Xiaomi also had a major fall, with its shipments falling by more than 30%, bringing its market share down to 10%. The company reportedly reduced its exposure to lower-priced smartphones and certain overseas markets to protect its profit margins as costs increased.

“Production cuts, tighter portfolios, and greater focus on premium ⁠devices ​are likely to continue, while price-sensitive segments face ​further pressure from higher device prices and limited availability of components,” the report said.