Global smartphone shipments tumbled 22% in the third quarter as soaring memory chip costs forced handset manufacturers to scrap lower-priced models and focus on premium models, delaying purchases for working-class consumers, according to a new note by Loop Capital Markets.
Loop Capital analyst John Donovan wrote early Tuesday that handset shipments totaled 251 million units in the quarter, down from 320 million a year earlier. The decline accelerated from 3% in the first quarter and 7% in the second.
Donovan added more color:
The smartphone market endured its most precipitous drop in unit shipments in CQ3 2026 by posting unit shipments worse than consensus estimates, but right in line with the morose outlook provided by Loop's TMT Smartphone squad these past 2-3 quarters.
All indications point to further declines in the coming quarters, perhaps a mild reprieve in CQ4 2026, but 2027 is shaping up to be another challenging year for the Smartphone suppliers.
In what cannot be a surprise to anyone by this time, skyrocketing costs particularly (but not limited to) the memory has decimated the ability to supply low-end solutions, and frankly we see little evidence of any relief soon.
In anticipation of the mushrooming memory costs, suppliers front-end loaded/pulled ahead shipments which certainly propelled 1H 2026 results. Not only are memory prices rising, but supply chain issues as well as trade flow disruptions will hamstring future results.
Loop's smartphone team breaks down the quarterly numbers:
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