Rising memory costs push China smartphone shipments into fifth straight quarterly decline
Smartphone shipments in China have fallen for a fifth consecutive quarter as surging memory costs force manufacturers to raise prices, signaling a steep global contraction that threatens entry-level device makers and reshapes market share.
Smartphone shipments in China fell 4.3 percent to 66 million units in the second quarter, marking the fifth consecutive quarter of annual declines. First-half shipments dropped 4.2 percent compared to the same period last year, according to figures published Tuesday by IDC.
Only two vendors managed to grow during this period. Huawei shipped 19.4 percent more phones than a year ago, capturing 22.6 percent of the market, while Apple grew by 24.4 percent to secure an 18.1 percent share.
Competitors retreated significantly. Xiaomi saw shipments plummet 21.7 percent, while Oppo and Vivo recorded declines of 9.7 percent and 11.4 percent respectively.
The dividing line between growth and contraction was pricing discipline. “Huawei and Apple held their prices steady while competitors were raising theirs, and that gave hesitant buyers a reason to go ahead and purchase in a quarter when most of the market was giving them a reason to wait,” said Arthur Guo, a senior analyst at IDC China.
These price increases stem from a surge in DRAM costs. Memory manufacturers are diverting wafer capacity toward high-bandwidth components required by AI accelerators, forcing the smartphone industry to bid for remaining supply.
Budget handsets are absorbing the heaviest blow, as cheap devices lack the profit margins to absorb components that have doubled in cost. Consequently, most Android vendors have either lifted prices or reduced their budget lines, discouraging price-sensitive consumers from upgrading.
This dynamic is not confined to China. IDC now forecasts worldwide smartphone shipments to fall 13.9 percent in 2026 to 1.09 billion units, representing the steepest annual contraction in the industry’s history, with China itself down by roughly 13 percent over the year.
This global figure is a downgrade from a 12.9 percent decline forecast in February, driven largely by low-end Android vendors struggling with the new cost environment. Meaningful relief for the supply chain is not expected until late 2027, leaving the current shortage to test vendor pricing strategies through the autumn.
