According to preliminary estimates from Omdia, global smartphone shipments in the third quarter of 2026 fell 20% year-on-year, a sharp widening from the 6% decline in the previous quarter.
Despite the launch of new flagship products and channel stockpiling for the year-end holiday sales season, shipments still declined sequentially.
Persistent memory and storage cost pressures have limited manufacturers' pricing flexibility, prompting them to reduce shipments of low-margin models.
The market downturn has further intensified the polarization of the competitive landscape.
Samsung and Apple together accounted for 45% of global shipments, up about 8 percentage points from the same period last year.
Compared with competitors that mainly target the mass market and saw larger shipment declines, these two manufacturers demonstrated stronger resilience, indicating that the current market downturn is reshaping the competitive landscape.
Samsung held the top spot with a 23% market share, and despite a year-on-year decline in shipments, its market share still increased.
Its broad product portfolio and mature global channel network helped Samsung cushion the impact of the market downturn, while the Galaxy Z Fold8 and Flip8 series launched in August also consolidated its high-end positioning.
Looking ahead, balancing shipment scale, product portfolio profitability, and premiumization will become increasingly important for maintaining Samsung's competitive position.
Apple ranked second with a 22% market share, showing strong resilience amid the overall market downturn.
Continued demand for the iPhone 17 series, along with the iPhone 18 Pro and Pro Max launched in September, helped Apple maintain market momentum.
The iPhone Duo marked Apple's entry into the foldable smartphone market, pushing its product lineup beyond traditional form factors and creating new opportunities to meet evolving consumer needs and capture incremental demand.
Although AI has not yet become a major driver of consumer purchases, Apple Intelligence is expected to play an increasingly important role in creating differentiated user experiences and maintaining Apple's long-term ecosystem advantages.
Xiaomi held third place with a 12% market share, while OPPO (including realme and OnePlus) ranked fourth with a 9% market share.
vivo entered the top five with an 8% market share.
Rising memory costs are squeezing profitability across all price tiers, with more price-sensitive products particularly affected.
This is also forcing manufacturers to reassess the profitability of entry-level products and make more cautious choices regarding product positioning, pricing, and market coverage.
Manufacturers are prioritizing average selling price growth and product mix optimization to sustain shipment value and protect profitability.
Omdia Chief Analyst Hayden Hou said: "Rising component costs and differences in manufacturers' response strategies are reshaping the competitive landscape, but market share alone does not tell the full story. As manufacturers make different trade-offs between shipment scale, revenue, and profitability, their performance cannot be assessed by shipment volume alone. More importantly, the strategic decisions manufacturers make during this market downturn may have long-term effects that outlast the current cost cycle. Expanding new channel partnerships, improving purchase financing capabilities, and strengthening premium product portfolios will determine which manufacturers can build more competitive and sustainable business models once cost pressures ease."
Omdia Senior Analyst Lucas Zhong said: "For manufacturers that mainly rely on price advantages to compete, protecting profitability while maintaining shipment scale has become an increasingly difficult balance. This pressure is especially pronounced in emerging markets, where consumers are more price-sensitive and manufacturers rely heavily on entry-level models with already thin margins. However, reducing shipments to protect margins carries long-term risks, especially for emerging manufacturers. A shrinking market presence may weaken brand visibility and channel influence, and rebuilding these advantages could take years. Manufacturers need to be more careful in choosing which markets to compete in, concentrating resources on markets and products that can balance profitability and market position."
Zhong further said: "Looking ahead to the fourth quarter, flagship launches, promotional activities, and holidays will still struggle to offset persistent supply-side pressures. Manufacturers need to manage inventory strictly while adopting more effective purchase financing, trade-in programs, and carrier partnerships to support replacement demand, avoiding reliance on broad price-cutting promotions. Although shipments remain under pressure, rising prices are gradually reshaping consumers' price expectations, potentially creating more opportunities for high-value models in future replacement cycles. Manufacturers that can make such products easier to purchase and deliver tangible improvements in user experience will be better positioned in the next replacement cycle."
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