The global smartphone market declined in the first quarter of 2026, bringing an end to a 10-quarter expansion streak, as shortages of memory chips and rising costs linked to the Iran conflict pressured manufacturers, according to data from IDC.
Chinese handset makers were hit hardest by the supply disruptions, with Xiaomi posting the steepest annual drop among leading brands, down 19%. In contrast, Apple (NASDAQ:AAPL) and Samsung (USOTC:SSHNZ) were the only companies among the top five to achieve growth during the period.
IDC warned that conditions are likely to worsen as the year progresses, noting that the shortage of memory chips is expected to continue into the second half of 2027.
The constrained supply environment has pushed production costs higher across the sector, with Chinese manufacturers particularly affected due to their exposure to highly price-sensitive segments of the market.