The smartphone market dropped by 7% in Q2 because of rising memory prices

Smartphone Market Shrinks in Q2 Amidst Soaring Memory Costs

The global smartphone market experienced a significant downturn in the second quarter, with shipments dropping by 7% year-over-year. This decline, as detailed in a recent FDM CCS Insight report, also saw a 3% dip compared to the first quarter of the current year. Looking ahead, FDM projects a substantial 12% decrease in worldwide smartphone shipments for the entirety of 2026.

Developed regions such as Europe and North America witnessed only modest declines in the low single digits. In contrast, emerging markets, where consumers are more susceptible to price fluctuations, bore the brunt of larger shipment drops.

Interestingly, the secondary smartphone market is thriving, defying the broader industry trend. FDM's findings indicate a 3% year-over-year growth in second-hand phone sales, with an optimistic forecast of nearly 10% growth for the full year.

This shift suggests a growing preference among consumers for more affordable refurbished devices over new smartphones. The primary driver behind this trend is the escalating cost of new devices, attributed to a global shortage of memory components. New smartphones saw a 13% price increase in Q2 when compared to Q1. FDM anticipates these upward price pressures on new phones to persist through the latter half of 2026.

However, the booming second-hand market is not without its own challenges. Increased demand coupled with a limited supply is gradually driving up prices for refurbished phones as well. A decrease in trade-in volumes within the United States has reduced the influx of devices into the secondary market. While strong export activities from China and Japan are helping to mitigate this shortage, the pressure on pricing is evident.

Source