According to data from market research firm IDC, worldwide smartphone shipments declined in the first quarter of this year, marking the first drop since 2023. Tight supply of memory chips and ongoing conflict in Iran are expected to further drive up costs and constrain market growth. Among the top five brands, Apple (AAPL.US) and Samsung Electronics (SSNLF.US) were the only two companies to achieve shipment growth, with both increasing by more than 3%, while the overall market contracted by 4.1%. Each of these two giants holds roughly one-fifth of the global market share, giving them an advantage over Chinese smartphone makers in securing long-term supply and managing soaring costs. Affected by surging component and logistics expenses, manufacturers such as OPPO saw significant shipment declines this year. A team led by IDC analyst Nabila Popal stated, "We expect the first-quarter slowdown to be a precursor to conditions in 2026. In several emerging markets, smartphone prices have already risen by 40%–50%, severely dampening demand." Apple performed strongly in China, where its popular iPhone 17 series helped the company achieve 30% growth in the world’s largest smartphone market. IDC also noted that Huawei and Honor both recorded shipment growth during the quarter, with Honor posting a 24% year-on-year increase through overseas expansion. Nevertheless, all manufacturers must adjust their product strategies to address the memory chip shortage, which is expected to persist until the second half of 2027. Data released last week by Counterpoint Research also showed a 6% decline in first-quarter shipments, though that report indicated Apple had surpassed Samsung in market share. Both research firms attributed the downturn primarily to soaring memory costs. IDC's Popal noted that, in addition to rising prices for components and raw materials, smartphone brands are facing higher shipping costs due to conflict in the Middle East. Many companies are restructuring their spending, including reducing specifications for certain models and cutting back on marketing and distributor support, measures that are further limiting market growth.
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