TrendForce has lowered its global smartphone production forecast for 2026, citing a weak macroeconomic environment, cautious consumer behavior, and steadily increasing memory prices. The expected year-on-year decline has widened from 2 percent to 7 percent compared to the November 2025 estimate, highlighting growing concerns for smartphone makers. Future adjustments will depend on memory price trends, brand pricing strategies, and consumer acceptance of higher handset costs.
Since the second half of 2025, the smartphone market has faced mounting pressure from tightening memory supply and rapid price increases. These factors have pushed up end-product prices, leading to a slowdown in consumer demand. TrendForce notes that while major brands have not yet significantly reduced 1Q26 production plans, the impact of higher prices on newly launched models is expected to affect production performance from the second quarter onwards.
Despite cautious market outlooks and some brands lowering annual production targets, memory procurement strategies remain unchanged. Brands continue to secure memory supplies to avoid cost surges or potential supply shortages in the future.
Aggressive production and shipment efforts at the end of 2025, combined with weaker sales following price increases and the diminishing effect of China’s subsidies, have caused inventory accumulation at leading smartphone brands. If retail sell-through does not improve, certain brands may cut future production as early as the end of 1Q26.
The first half of 2026 will be critical for brands to recalibrate output levels and refresh product portfolios. Adjustments to specifications and pricing strategies aim to offset earlier cost increases. However, given existing inventories and production-line timelines, significant changes in production schedules are expected between the second and third quarters of 2026.
Global smartphone shipments reached 1.26 billion units in 2025, up 1.9 percent year-on-year, according to IDC. Despite a positive 2025, the industry faces a challenging 2026 due to a memory shortage, which is expected to drive market decline. Larger OEMs are likely to manage the disruption better by securing supply and maintaining workable prices. Average selling prices (ASPs) are projected to rise amid higher costs.
Omdia says global smartphone shipments reached 1.25 billion units in 2025, up 2 percent year-on-year, driven by strong demand in emerging markets and successful flagship launches. However, rising memory costs and shortages began to constrain growth in late 2025. Looking ahead to 2026, vendors are expected to focus on pricing discipline, operational efficiency, and supply-side strategies, including tighter configurations, trade-ins, ecosystem bundling, and early consolidation moves, to manage costs and maintain competitiveness.
BABURAJAN KIZHAKEDATH
