Weakest Q3 in 14 Years: Why Is Global Smartphone Supply Declining?

If you are planning to buy a new smartphone, you may have to shell out more money in the coming days. Companies providing better cameras, higher RAM, and large storage are struggling with a unique challenge: acquiring essential memory chips at higher costs. This is directly impacting production costs, retail prices, and product availability.

Worst Condition in 14 Years Due to AI Demand

According to preliminary estimates by Counterpoint Research, global smartphone shipments fell by 20% year-on-year between July and September 2026. This marks the lowest level for a third quarter since 2012, highlighting the weakest market performance in nearly 14 years.

At the center of this crisis are two types of memory chips: DRAM (used for RAM) and NAND flash memory (used for storage). With AI companies building massive data centers, the demand for specialized memory and high-bandwidth chips has skyrocketed. Chipmakers are allocating more capacity to high-margin products, squeezing the supply available for smartphones.

Impact on India and Market Leaders

Counterpoint Research estimates that smartphone shipments in India could drop by around 20% year-on-year during the third quarter of 2026. Despite the broader market slump, Samsung retained the top spot with a 23% global market share, while Apple captured 22%.

Experts suggest that if your current phone is functioning well, holding off on an upgrade for a bit longer might be a practical choice to avoid inflated market prices.