Samsung reclaims top spot as memory shortage squeezes smartphone market

Seoul [South Korea], July 14 (ANI): Samsung Electronics reclaimed the top spot from archrival Apple in the global smartphone market in the second quarter, as industrywide shipments fell to their lowest level for the period since 2013 amid a memory supply crunch. Soaring memory prices squeezed both manufacturers and consumers during the period, shifting the dynamics among the world's largest tech brands.
According to a news report by The Korea Herald, the broader market contracted sharply as global smartphone shipments fell 11 per cent on-year. Citing market tracker Counterpoint Research, the news report attributed the decline to shortages of DRAM and NAND flash, which occurred as chipmakers prioritized surging demand from artificial intelligence data centers.
Memory and storage now account for more than 60 per cent of production costs for some budget smartphones and over 30 per cent for premium models. Memory costs for some manufacturers rose four- to five-fold from a year earlier, while foundry and other semiconductor bottlenecks added further pressure.
The news report noted that the preliminary data from Counterpoint Research showed Samsung capturing a 24 per cent share of global shipments, overtaking Apple at 20 per cent. This reversed the standings from the first quarter, when Apple led with 21 per cent compared to Samsung's 20 per cent.
"Higher component prices lifted production costs and weighed on consumer demand," the news report quoted Counterpoint Research.
Samsung's gains were driven by relatively restrained price increases and aggressive promotions in India and the Middle East, alongside strong sales of its Galaxy S26 series. Demand was particularly strong for the Galaxy S26 Ultra, helped by its privacy display and artificial intelligence features.
Meanwhile, Apple's shipments rose 3 per cent from a year earlier, supported by steady demand for the iPhone 17 series and its decision to keep prices unchanged, unlike other major vendors.
Separate data from research firm Omdia placed Samsung first with a 22 per cent share, followed by Apple at 20 per cent. The supply crunch severely impacted Chinese smartphone makers, who lost ground in Omdia's tally. Xiaomi's share fell to 11 per cent from 15 per cent a year earlier, while Oppo dropped to 10 per cent from 12 per cent and Vivo slipped to 8 per cent from 9 per cent.
The impact was most severe for smartphones priced below UDS 400, where thin margins and high price sensitivity left vendors with little room to pass rising component costs on to consumers. Industry analysts projected that the shipment decline would deepen in the second half of the year as supply constraints persist through major product launches and the year-end shopping season.
"Manufacturers are hoping for a near-term correction, but memory prices are unlikely to begin falling before the second half of 2027," the news report quoted Le Xuan Chiew, a research manager at Omdia.
"Even then, they are unlikely to return to pre-2025 levels," Chiew said.
In response to costs, Samsung raised prices for the Galaxy S26 series launched in February, ending a multiyear price freeze. As per the news report, in April, the manufacturer also increased the Korean retail price of the 512-gigabyte Galaxy Z Fold7 and Flip7 by 94,600 won (USD 64), an unusual move for devices that had been on the market for less than a year.
Other tech firms followed, with Apple raising prices for some MacBook and iPad models by USD 100 to USD 300 in June. Chinese brands including Vivo, Oppo, and Xiaomi also raised prices by 100 yuan to 500 yuan (USD 14 to USD 70), despite traditionally competing on affordability. (ANI)