The global smartphone market shrunk by a drastic 20 per cent in the third quarter of this year, as memory and storage prices continued to skyrocket and manufacturers’ buffer stocks slowly ran out.
The steep drop in shipments of smartphones from a year ago is worse than the 6 per cent decline recorded in the previous quarter, according to Omdia yesterday.
The research firm noted that the smartphone market is now at its lowest level since 2013, a situation once unthinkable as more consumers sought out the latest mobile gadgets.
However, memory costs have surged by as much as 350 per cent since last year, according to other surveys, driving up overall costs for smartphone makers. By now, they have likely exhausted any buffer stock they had held and are now transferring the cost to consumers.
Particularly hit hard are entry-level smartphones that are low on margin for smartphone makers but reach more potential buyers in emerging markets, according to Omdia.
This could be one reason why Samsung and Apple, best known for their flagship phones, retained their top two positions globally, while either keeping or adding market share, it noted.
In the last quarter, Samsung remained the biggest smartphone maker with 23 per cent of the market, gaining share despite a year-on-year decline in shipments.
The August launch of the premium foldables Galaxy Z Fold 8 and Galaxy Z Flip 8 helped to support its premium positioning, according to Omdia.
Apple came in second with 22 per cent of the market, showing strong resilience in the difficult situation. The iPhone 17 family, plus new entrants like the iPhone 18 family and foldable iPhone Duo in September, is helping to capture incremental demand.
Behind the top two, Chinese smartphone makers followed from a distance. Xiaomi captured 12 per cent of the market, Oppo (including Realme and OnePlus) had 9 per cent and vivo held 8 per cent.
Phone makers face a tough decision to ship more low-cost entry-level phones or focus only on costlier versions at risk of losing market presence over the long term, said Lucas Zhong, a senior analyst at Omdia.
The upcoming fourth-quarter festive season, with new flagship launches, is unlikely to fully offset the persistent supply problems, he added.
