Rising Costs and Supply Chain Issues
According to Omdia’s latest research, the global smartphone market grew by 1% year-on-year in the first quarter of 2026. This growth, however, does not yet fully reflect the rising supply-side costs, as inventory frontloading by vendors temporarily supported shipments. Memory and storage costs, including mobile DRAM and NAND, increased sharply, rising by around 90% in Q1 and expected to climb another 30% in Q2.
Samsung reclaimed its position as the top vendor in Q1, driven by strong demand for its Galaxy S26 series. Pre-orders for the Galaxy S26 were up over 10% globally compared to the Galaxy S25 series, despite launch delays affecting mid-range products. Meanwhile, Apple delivered a solid performance, supported by stable pricing and steady demand for the iPhone 17 series, even amid regional supply disruptions.
Market Dynamics and Vendor Strategies
Most Android vendors are encountering challenges with both volumes and margins. In response, they are adopting tighter product portfolios and more disciplined pricing. Huawei’s strong domestic performance and HONOR’s overseas expansion contributed to market share gains. According to Sanyam Chaurasia, Principal Analyst at Omdia, “Vendors have little choice but to raise prices as cost pressures intensify.” He noted that Xiaomi and TRANSSION, focused on entry and mid-tier segments, face greater challenges due to thinner margins.
Runar Bjorhovde, another Principal Analyst at Omdia, commented, “Higher pricing is creating a demand shock, with consumers delaying purchases.” He added that while some channel partners are increasing inventory to temporarily support shipments, this approach merely delays the impact on vendors. Early signs of logistics and trade flow disruptions are adding friction to global supply chains, complicating the situation further.
