Consumers Shut Their Wallets as Phone Prices Soar... Samsung No. 1 Despite Market Chill [IT Item of the Day]

[Financial News] Global smartphone shipments fell to their lowest level in 14 years amid rising memory chip prices and supply shortages. As higher smartphone prices lead consumers to put off replacing their devices, Samsung Electronics and Apple have fared relatively well and increased their market shares. The mid- and low-end phone market, especially sensitive to prices, has taken a major hit, prompting manufacturers to strengthen their focus on high-end products.
On the 16th, according to market research firm Counterpoint Research and others, global smartphone shipments in the third quarter of this year fell 20% from the same period last year. For the third quarter, this was the lowest level since 2012, a 14-year low.
Rising memory chip prices are seen as a key cause of the market contraction. Greater investment in AI infrastructure has boosted memory demand, driving up prices for DRAM and NAND flash and raising smartphone manufacturing costs. As manufacturers pass higher component costs on to consumers, global smartphone retail prices have risen by around 20% so far this year.
As the cost burden grows, consumers are using their existing smartphones for longer or turning to used and refurbished devices. Manufacturers, too, are focusing on profitability rather than expanding sales, and shipments of relatively price-sensitive mid- and low-end products have fallen sharply.
Even amid the market downturn, Samsung Electronics and Apple increased their market shares. Samsung Electronics held on to first place in the third quarter, with a 23% share of global smartphone shipments. Shipments fell 3% year on year, but the decline was smaller than at rival companies, thanks to early demand for the Galaxy Z Fold8 series and a steady supply of components for the Samsung Galaxy A series.
Apple, with a 22% share, trailed Samsung Electronics by 1 percentage point. This was the first time Apple’s third-quarter share had exceeded 20%. Total shipments fell because the base iPhone 18 model had not been released, but the iPhone 18 Pro series saw stronger early sales momentum than its predecessor in China, India and other markets.
By contrast, Chinese manufacturers struggled. Xiaomi’s shipments fell more than 30% year on year, bringing its market share down to 10%. Oppo and Vivo also each saw shipments drop by more than 20%. As rising memory prices eroded the profitability of mid- and low-end products, manufacturers have cut sales in some markets and increased the share of high-end products in their lineups.
Counterpoint Research forecast that challenges in the smartphone market would continue for the rest of this year. It said manufacturers may continue to cut production and focus on high-end products as pressure from component prices persists.
[email protected] Yoon Hong-jip Reporter