Omdia reports that global smartphone shipments fell 4% year-over-year in Q2 2026, fueled largely by the ongoing memory crisis that has disrupted supply and led to rising component costs.
The result, says Omdia, is market polarization with Samsung and Apple not only continuing to dominate, but increasing their marketshare by 2% and 4%, respectively, compared o Q2 2025.
Samsung remained the largest smartphone vendor through the quarter with 22% market share, helped by resilient demand and strong supply availability, says Omdia. The delayed launch of the Galaxy S26 series pushed some demand into the second quarter for the premium segment.
At the same time, Samsung gained ground in the budget segment as well as Chinese rivals pivoted to a more conservative strategy by reducing product lines and increasing device sell-in prices.
Apple, meanwhile, delivered its best second-quarter performance ever, capturing a record-high 20% market share during what is traditionally its slowest quarter of the year. The iPhone 17 series delivered one of the strongest iPhone refresh and upgrade cycles in Apple’s history.
Apple also benefited from stable pricing while most competitors were forced to raise their pricing. However, as Apple raised pricing across other products towards the end of the quarter, it remains to be seen how iPhones will be impacted with similar price hikes later this year.
The mass market declines, however, squeezed many players beyond the top two. On the ranking table, Xiaomi defended its third spot with 11% market share. OPPO held fourth at 10% share as it underwent restructuring to optimize its three-brand umbrella. vivo rounded out the top five with 8% market share. All others combined accounted for 29%.
According to Runar Bjorhovde, Principal Analyst at Omdia, the steepest volume drops were in the sub-$400 mass market segment where “supply constraints are tightest, profit margins are slimmest, and price sensitivity is highest.” As a result, vendors are moving from a strategy of volume to reoptimizing portfolios and adjusting retail pricing.
“Managing the surging component costs is incredibly complex and unpredictable,” adds Bjorhovde, “with some vendors facing memory costing more than four to five times what they did a year ago. Memory and storage alone now account for more than 60 per cent of the bill-of-material for budget devices and more than 30 per cent for high-end models.”
He adds that while memory and storage costs are the biggest challenges for vendors, they aren’t the only challenge. “New semiconductor bottlenecks, such as within foundries, are adding further cost pressures.”
Le Xuan Chiew, Research Manager at Omdia, says that memory price declines are expected to begin in the second half of 2027, at the earliest. But even then, they won’t return to pre-2025 levels.
“Smartphone vendors’ tactical adjustments should not be considered short-term response tactics,” adds Chiew, “but rather key permanent strategic shifts that will ensure business agility and sustainability in the years to come.”
The prediction is that the sharpest volume declines will come in the next two quarters, which is ironically when seasonal demand normally peaks with new launches and the holiday season. Thus, vendors are more likely to lean into the higher price segments to capitalize on customers who need to upgrade devices. That, however, leaves budget-constrained customers with fewer options.
“Many mass-market buyers will be forced to delay purchases, downgrade expectations, utilize financing, or opt for refurbished devices,” advises Bjorhovde.