The global smartphone market fell more than 4% year-on-year in the first quarter of this year, ending 2.5 years of consecutive growth, according to a new market intelligence report.
Things are expected to get even worse as the memory shortage bites even harder, but the tactic adopted by Apple is paying off …
Sharp reversal to global smartphone growth
The majority of the smartphone market works on relatively tight margins, meaning that brands have little choice but to pass on the costs to consumers when memory and other component prices are rising by 100% and more. Those increased prices are largely responsible for an end to two and a half years of consecutive growth.
IDC estimates that worldwide smartphone shipments fell 4.1% year on year in the first quarter of this year – and things are only going to get worse from here.
The smartphone market has entered one of its most challenging periods, driven by acute memory supply constraints that are directly impacting both shipments and demand. Limited memory availability is forcing shipment reductions, while sharply higher memory prices are […] forcing price hikes by many top brands.
In several emerging markets, prices have risen by as much as 40–50%, significantly weighing on demand […] The 4% decline in the market is just a sample of what’s to come as the memory situation intensifies on all fronts.
Apple tactic paying off
IDC says that both Apple and Samsung have much more margin to play with in their premium devices, and have therefore been able to leave prices untouched, boosting demand. It notes that both companies continued to enjoy growth in their smartphone shipments: 3.6% year-on-year in the case of Samsung, and 3.3% for iPhone.
However, events seem to have overtaken the company’s report as Samsung yesterday raised the prices of a number of its phones – albeit in a modest way.
Affected devices include Samsung’s high-end smartphones including Galaxy Z Flip 7, Galaxy S25 Edge, and the upper mid-range Galaxy S25 FE, but also nearly every Galaxy tablet currently on sale. On the higher-end devices, Samsung isn’t raising the starting price, but any upgraded storage variants are jumping by $40-80.
This could see Apple as the only major player to leave its smartphone prices unchanged, with the obvious likely benefit of continued growth as the rest of the market falls.
A separate analyst report yesterday suggested that Apple has made the unusual decision to sacrifice margin in favor of growth given the unique opportunity provided by the current tech landscape.
It should be noted that market intelligence firms like IDC and Counterpoint rely on a range of metrics to put together estimates of shipments, but these will never be completely accurate, hence conflicting numbers in their most recent reports.
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