- Analyst Report Claims Primary Smartphone Market Expected to Decline 14.8% in 2026
- Prices for entry-level smartphones have already increased by more than 50% this year
- Sales of refurbished smartphones grew by 4% year-on-year during the first quarter of 2026
The global smartphone market is heading for a tough 2026 as rising component costs force manufacturers to increase device prices, new research claims.
New findings from FDM CCS Insight note that the core smartphone market is expected to decline by 14.8% in 2026 as memory shortages continue to impact production.
The drop follows a 4.4% year-on-year contraction in the core smartphone market during 1Q26, despite manufacturers and retailers building inventories earlier.
Memory shortage pushes buyers to opt for refurbished smartphones
As consumers look for cheaper alternatives to new devices, demand for refurbished smartphones is expected to increase, but so does 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 keep their phone longer, and these effects will be much more pronounced for consumers who buy 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 no longer available in 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 computing infrastructure.
These facilities compete for the same DRAM and NAND flash memory production capacity that smartphone manufacturers depend on, leaving less supply available for consumer devices.
Memory components now make up more than 30% of the bill of materials in some smartphones, increasing 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 secondary smartphone market has already begun to benefit from the change in consumer behavior, with organized sales increasing 4% year-on-year during 1Q26.
FDM CCS Insight forecasts this market segment will expand 15.4% globally during 2026 as demand shifts away from new devices.
However, stronger demand could also lead to higher prices for refurbished smartphones as available supply struggles to meet consumer interest.
Supply Challenges Could Determine Refurbished Market Growth
The renewed market faces a significant challenge because the expansion of supply depends largely on exchanges, buybacks and improvement programs.
FDM CCS Insight expects premium smartphones, particularly devices priced above $750, to continue to drive much of the available trade-in supply.
These devices are less affected by current pricing pressures, allowing manufacturers and retailers to maintain stronger upgrade incentives.
“The secondary market has the opportunity to meet some of the demand that will not be met by the primary market. The main challenge in the short term is to increase supply during a fallow period of flagship releases,” Hatton said.
“Countries with mature exchange 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.”
The shift suggests that consumers may increasingly evaluate refurbished smartphones as alternatives as prices for new devices continue to rise.
“Demand continues to far outstrip supply in the global secondary market. 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 sustained growth will depend on supply availability, price stability and how manufacturers respond to changing market conditions.
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