According to Counterpoint Research's latest "Global Smartphone Shipment Tracker and Forecast," rising component costs are expected to dampen end demand, leading to a projected 2.1% decline in global smartphone shipments in 2026. This downward revision represents a 2.6 percentage point adjustment from Counterpoint's earlier forecast. Chinese OEMs such as HONOR, OPPO, and vivo are expected to see more significant revisions compared to previous estimates.
Hwang MS, Research Director at Counterpoint Research, noted that the sub-$200 market segment is particularly vulnerable, with bill of materials (BoM) costs rising 20%–30% since the beginning of the year. Meanwhile, mid-to-high-tier segments have experienced cost increases of around 10%–15%. Counterpoint's recent "Memory Solutions for GenAI" study suggests that memory prices could surge by another 40% by Q2 2026, further driving up BoM costs by 8%–15%.
Senior Analyst Yang Wang highlighted that lower-priced segments have limited room for price hikes. If OEMs cannot fully pass on cost increases, they may adjust product strategies. Recent market trends already show reduced shipments for some low-SKU models. Due to cost pass-through and product mix adjustments, Counterpoint now expects the average selling price (ASP) of smartphones to rise 6.9% year-over-year in 2026, up from its previous forecast of 3.9% in September 2025.
Brands with scale advantages, diversified product portfolios (especially in premium segments), and vertical integration capabilities are better positioned to navigate supply chain fluctuations. Yang Wang added that market competition could become more fragmented in the coming quarters, with some brands facing challenges in balancing market share and profitability. These effects may unfold gradually over time.
Counterpoint also observed OEMs adopting varied strategies. Senior Analyst Shenghao Bai noted that some models have already adjusted specifications, including camera modules, periscope technology, displays, audio components, and memory configurations. Other approaches include reusing existing components, streamlining product lines, or encouraging consumers to opt for higher-spec versions to mitigate cost pressures.
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