Global mobile phone prices hit all-time high as shipments plummet

The global smartphone market is undergoing a major structural shift as manufacturers abandon low-cost, high-volume strategies in response to soaring component costs and geopolitical uncertainty.

According to new research from technology advisory group Omdia, global smartphone shipments are forecast to contract by 12.2% year-on-year in 2026, dropping to 1,093 million units – a decline of 152 million units compared to last year.

Despite this significant drop in volume, the total value of the market is projected to grow by 6.1% over the same period. This stark divergence is driven by a historic surge in retail pricing, with the global average selling price (ASP) for smartphones forecast to jump 21% from $467 in 2025 to an all-time high of $565 in 2026.

Phone prices are rising primarily due to severe margin pressures across the supply chain. In the first quarter of 2026, average DRAM and NAND flash memory prices skyrocketed by more than 80% quarter-on-quarter.

While these price hikes are expected to slow down in the second half of the year, component costs will remain structurally elevated, forcing nearly every major smartphone brand to pass these expenses on to consumers.

Jusy Hong, Senior Research Manager at Omdia, noted that the industry is experiencing significant disruption as vendors manage short-term cost pressures. He added that a market stabilization phase is expected toward the second half of 2027, followed by a price readjustment period in early 2028 when component supply capacity increases.

To protect their profit margins, global vendors are actively scaling back their low-end product lines to focus on premium, high-value portfolios. Runar Bjorhovde, Principal Analyst at Omdia, stated that vendors and regions heavily dependent on budget smartphones will be particularly exposed to these changes.

Consequently, emerging markets in Africa, the Middle East and Latin America are expected to see a heavy drop in demand, while premium-heavy developed markets will remain more resilient. Omdia predicts that meaningful volume recovery for the industry will not begin until 2028.