- An analyst report claims that the core smartphone market is expected to decline by 14.8% in 2026.
- Prices of entry-level smartphones have already increased by more than 50% this year
- Sales of refurbished smartphones increased by 4% year-on-year in the first quarter of 2026.
The global smartphone market is heading for a tough 2026 as rising component costs force manufacturers to raise device prices, according to a new study.
New findings from FDM CCS Insight indicate that the core smartphone market is expected to decline by 14.8% in 2026 as memory shortages continue to impact production.
The decline follows a 4.4% year-on-year contraction in the primary smartphone market in 1Q26, although manufacturers and retailers stockpiled earlier.
Lack of memory pushes buyers towards refurbished smartphones
As consumers look for cheaper alternatives to new devices, the demand for refurbished smartphones is expected to increase, as is the price.
FDM CCS Insight reports that some entry-level smartphones have already seen price increases of more than 50% compared to the previous year.
“Many consumers will hold onto their phones longer, and these effects will be much more pronounced for consumers purchasing phones under $500,” said Ben Hatton, research analyst at FDM CCS Insight.
“Some consumers will need a new phone… and so we expect increased demand for refurbished smartphones as many of them are priced out of the new device market.”
The memory shortage driving these price increases is largely attributed to the growing demand for AI data centers and AI-accelerated IT infrastructure.
These facilities compete for the same DRAM and NAND flash production capacity that smartphone makers depend on, leaving less supply available for consumer devices.
Memory components now represent more than 30% of the nomenclature of certain smartphones, increasing the pressure on manufacturers.
The impact is expected to continue to affect low- and mid-range devices as companies adjust their pricing strategies throughout the year.
The smartphone secondary market has already started to benefit from changing consumer behavior, with organized sales increasing 4% year-on-year in 1Q26.
FDM CCS Insight forecasts this market segment to grow 15.4% globally in 2026 as demand shifts away from new devices.
However, higher demand could also lead to higher prices of refurbished smartphones as the available supply struggles to meet consumer interests.
Supply Challenges Could Determine Refurbished Market Growth
The refurbished market faces a major challenge as supply expansion is heavily dependent on trade-in, buyback and upgrade programs.
FDM CCS Insight expects that high-end smartphones, particularly devices priced above $750, will continue to drive a large portion of the available trade-in supply.
These devices are less affected by current pricing pressures, allowing manufacturers and retailers to maintain stronger incentives to upgrade.
“The secondary market has the opportunity to meet some of the demand that will not be met by the primary market. The major short-term challenge is to increase supply during a period of inactivity of flagship launches,” Hatton said.
“Countries with mature recovery programs will be in a much stronger position to capitalize on this opportunity and maintain higher growth rates in the secondary market for the remainder of the year.” »
This shift suggests that consumers may increasingly evaluate refurbished smartphones as alternatives as prices of new devices continue to rise.
“Demand continues to far outstrip supply in the global aftermarket. Trade-in discounts, early upgrade offers and more lucrative trade-in promotions will be key to unlocking the market’s full growth potential in 2026 and 2027,” he added.
Whether this trend will produce sustainable growth will depend on supply availability, price stability and how manufacturers respond to changing market conditions.
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