--- title: "The Worst Year in Mobile Phone Industry History: Soaring Memory Costs, Rising Oil Prices, and Extended Replacement Cycles—Who Can Withstand the Pressure?" type: "News" locale: "en" url: "https://longbridge.com/en/news/287880542.md" description: "Global smartphone shipments in 2026 are projected to plummet by 14%, marking the largest annual contraction on record. Driven by AI-driven memory demand pushing up costs and the US-Iran war increasing transportation expenses, the average smartphone price has surged to $550. Apple, having secured memory supplies in advance, deepened its presence in the Chinese market, and precisely targeted the high-end segment, is expected to see its full-year shipments decline by only 5.2%, demonstrating resilience under pressure" datetime: "2026-05-28T08:11:17.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287880542.md) - [en](https://longbridge.com/en/news/287880542.md) - [zh-HK](https://longbridge.com/zh-HK/news/287880542.md) --- # The Worst Year in Mobile Phone Industry History: Soaring Memory Costs, Rising Oil Prices, and Extended Replacement Cycles—Who Can Withstand the Pressure? The global smartphone industry is heading toward its most severe annual contraction ever, while Apple is demonstrating significant resilience through forward-looking strategies amid the broader market's deep troubles. According to the latest forecast from market research firm IDC, **global smartphone shipments in 2026 will drop 14% year-over-year to 1.09 billion units,** a further deterioration from the 12.9% decline predicted by the firm in February this year. If realized, this would set a record for the largest annual contraction in the industry's history. Meanwhile, IDC has narrowed its expectation for the annual decline in Apple iPhone shipments from the previous 8.1% to 5.2%, whereas Android smartphone shipments could face a year-over-year drop of up to 20%. This industry downturn is driven by a confluence of factors: the construction of AI data centers is snapping up memory resources and driving up the cost of key components, while the US-Iran war has triggered rising oil prices and soaring transportation costs, leaving smartphone manufacturers squeezed from both sides. IDC data shows that these pressures are pushing the global average selling price (ASP) of smartphones to a record $550, a substantial jump of $100 from last year. ## Deepest Drop in History: AI Snatches Memory, Forcing Manufacturers to Raise Prices and Cut Shipments IDC's latest report indicates that the 14% decline in global shipments will surpass the industry recession records of any previous year. One of the core drivers behind this slump is the surging demand for key components like memory from artificial intelligence infrastructure construction, which far outstrips supply, causing a global shortage and sending memory costs soaring. This is a boon for memory chip manufacturers like Micron Technology but serves as a significant headwind for smartphone makers. **Facing cost pressures, manufacturers have generally chosen to reduce shipments, raise prices, and concentrate resources on high-end product lines.** On the demand side, the lengthening consumer replacement cycle is also impossible to ignore—as device prices climb steadily, more users are choosing to delay upgrades. IDC data shows that the average smartphone price has risen to a historic high of $550, equivalent to a $100 increase within a year. ## War Premium: US-Iran Conflict Compounds Transportation Costs, Intensifying Pressure In addition to memory shortages, geopolitical risks are emerging as a new variable for the industry. Nabila Popal, Senior Research Director at IDC, wrote in the firm's latest report: "The US-Iran war has brought a new round of cost pressures to smartphone OEMs, primarily reflected in rising oil prices and increased transportation costs." She pointed out that this pressure, combined with elevated memory costs, is driving manufacturers to further cut shipments, raise prices, and shift their focus to higher-priced models. Nabila Popal stated that these multiple factors have collectively pushed the average selling price of smartphones to a record $550, up $100 from last year. ## Apple's Three Trump Cards: Secured Supply, Chinese Market, and Precise High-End Positioning Against the backdrop of industry-wide pressure, Apple has stood out in the competition thanks to its forward-looking layout. Francisco Jeronimo, Vice President of Client Devices at IDC, stated: "Apple has achieved three things that few competitors can: **securing memory supplies in advance, creating a product portfolio attractive enough for the Chinese market, and precisely positioning the iPhone 17 to meet the demand window of consumers in mature markets who are extending their replacement cycles and pursuing high-end upgrades.**" Looking ahead to the second half of the year, Apple holds several potential catalysts. Analysts expect Apple to unveil highly anticipated artificial intelligence feature updates at its annual Worldwide Developers Conference opening on June 8; meanwhile, a high-end foldable iPhone is also expected to be released within the year. Strong demand for high-performance AI features, combined with innovations in iPhone hardware form factors, is poised to attract new users and encourage existing users to upgrade earlier than planned. ### Related Stocks - [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md) - [AAPX.US](https://longbridge.com/en/quote/AAPX.US.md) - [MU.US](https://longbridge.com/en/quote/MU.US.md) ## Related News & Research - [These new iOS 27 renders hint at Siri’s big redesign](https://longbridge.com/en/news/287937811.md) - [Apple’s newest iPad Air is up to $100 off for the first time](https://longbridge.com/en/news/287824846.md) - [Finance titan Jan van Eck warns memory stocks look 'bubblelicious'](https://longbridge.com/en/news/287778448.md) - [BREAKINGVIEWS-Anthropic’s turbo-growth is only half the AI story](https://longbridge.com/en/news/287781116.md) - [1 Outstanding AI Stock You’ll Regret Ignoring 10 Years From Now](https://longbridge.com/en/news/287467984.md)