Q1 smartphone shipments dropped 6 per cent year-on-year, according to preliminary data from Counterpoint Research, as tight supplies of DRAM and NAND memory components and weak consumer sentiment combined to pressure the global market.
The research firm said chip makers have been prioritising memory production for artificial intelligence infrastructure, leaving device manufacturers with compressed margins. As a result, original equipment manufacturers passed higher bill-of-materials costs directly to consumers.
Memory Supply Squeeze Drives the Decline
Counterpoint senior analyst Shilpi Jain said the drop in Q1 smartphone shipments was “primarily driven by memory players prioritising AI data centers over consumer electronics, leaving OEMs with compressed margins and forcing them to pass increased bills of material costs directly to the consumer.”
“While supplies remained constrained, rising energy prices, higher logistics costs, and economic uncertainty driven by tension in the Middle East kept consumer sentiment for new devices low, driving demand for refurbished devices and further weighing on shipments.”
Shilpi Jain, Senior Analyst, Counterpoint Research
Jain noted these pressures hit lower-priced market segments hardest, while premium brands showed more resilience. Device makers responded by releasing fewer new models and adjusting pricing strategies.
Apple Gains Ground While Samsung Slips
Among the top five vendors by shipments, Apple was the only one to grow its market share. A 5 per cent year-on-year rise in shipments placed Apple at the top of the rankings with a 21 per cent share. Samsung followed with a 20 per cent share, though its shipments fell 6 per cent. Counterpoint attributed Samsung’s decline to the delayed launch of the Galaxy S26 series, which went on sale in March 2026, compared to the Galaxy S25 launch in February 2025, alongside weaker demand in the mass-market segment.
Xiaomi Records Steepest Drop Among Top Five
Xiaomi, Vivo, and Oppo rounded out the top five vendors. Xiaomi recorded the largest shipment decline among the group, falling 19 per cent year-on-year. Vivo and Oppo also posted declines, though Counterpoint did not provide specific figures for those two brands.
Outside the top five, Counterpoint flagged notable growth from two smaller players. Google posted 14 per cent year-on-year shipment growth, while Nothing recorded a 25 per cent increase. Both figures stand out against the broader market contraction in mobile devices.
Outlook Remains Weak Through 2027
Counterpoint offered little optimism for the remainder of 2026. The firm stated the outlook “remains weak, as the memory crunch may last until late 2027.” Continued pressure on the economy from geopolitical tensions, elevated logistics costs, and constrained memory supply are expected to keep consumer demand subdued. The growing preference for refurbished devices signals that buyers are actively seeking lower-cost alternatives rather than upgrading to new handsets.
Counterpoint noted that while some regions showed relative stability during the quarter, overall market sentiment stayed cautious. The firm’s full Q1 data is expected to be released in the coming weeks, which may provide a clearer picture of regional performance and brand-level trends.
