The sharp downturn that the industry had been bracing for has materialized, according to IDC senior research director for worldwide devices Nabila Popal. "However, the worst is yet to come," she said. "Current indicators suggest that the market has not yet reached the bottom."
IDC estimates that vendors shipped 255.3 million smartphones into distribution channels in the quarter. Omdia puts the figure at roughly 255 million, a close match despite the different annual decline figures.
The memory crisis, which has seen costs surge by roughly 350 percent since last year according to IDC, continues to put substantial pressure on vendor margins. While memory inflation is beginning to slow — with a low double-digit sequential increase in Q3 compared to 50 to 100 percent jumps in prior quarters — costs remain elevated across other critical components as well, compounding the crunch.
The shrinking market has further polarized the competitive landscape. Samsung and Apple now account for about 45 percent of global shipments, up approximately 8 percentage points from a year ago, as rising costs hit price-sensitive segments particularly hard.
Omdia still expects global smartphone shipments to fall 12 percent across 2026, followed by another 6 percent decline next year. The firm previously forecast that devices priced above $400 would prove more resilient and could record shipment growth.
"We don't anticipate any relief to the current memory crisis before 2028 at the earliest as we expect there to remain a considerable gap between demand and supply," said Omdia principal analyst Runar Bjorhovde. "The first signs of improvement we're looking for is when the memory pricing will stabilize (basically stopping to grow), and we're still not there yet."
Omdia says investment in distribution partnerships and premium devices could determine which vendors emerge stronger when costs ease. New flagship launches, promotions and festive demand in the fourth quarter are unlikely to fully offset persistent supply-side pressures. Buyers may get used to paying more, potentially creating greater opportunities for higher-value devices. Some phone makers are already switching to cheaper display panels, sensors or radio frequency modules to offset rising memory costs.
IDC also sees little prospect of recovery before 2028 and expects a lasting shift toward higher costs, adding that vendors which adapt their products and pricing will be best placed to gain market share.