Apple faces a tougher year ahead. New forecasts show iPhone sales falling in 2026, while manufacturing costs continue to climb. At the same time, the broader smartphone market is shrinking, which adds more pressure on pricing and demand.
You are likely to feel this shift if you plan to upgrade next year. Phones will cost more to make, and that change rarely stays hidden from buyers.
Global smartphone market outlook
Counterpoint Research released updated shipment forecasts for 2026.
The firm expects global smartphone shipments to drop by 2.1 percent next year. Rising component costs are the main reason. Demand weakens as prices rise, especially in cost-sensitive markets.
Apple stands out in this forecast. Counterpoint expects iPhone shipments to fall 2.2 percent year over year. That decline is larger than what analysts project for Samsung, Xiaomi, Vivo, or Oppo.
Phones cost more to build
Counterpoint Research points to memory as the biggest problem.
The company says bill of materials costs for low-end phones have jumped 20 to 30 percent since the start of the year. Mid-range and high-end devices have seen cost increases of 10 to 15 percent. DRAM price hikes already pushed costs higher across every segment, and more increases are expected through the first half of 2026.
Because of this, average selling prices are also rising. Counterpoint now expects prices to increase 6.9 percent next year, up from earlier estimates.
What phone makers are doing
The Research also says not every brand can absorb these costs. Apple and Samsung have scale, premium products, and tighter control over their supply chains. That helps them manage profits better than smaller rivals. Chinese brands face tougher choices and are already cutting back on low-end models.
To cope, many companies are taking steps like:
- Reducing features in cameras, displays, and audio parts
- Reusing older components across models
- Pushing buyers toward higher-priced Pro variants
You should expect fewer budget phones and higher prices across the board. If memory costs keep rising, smartphone upgrades in 2026 will cost more, even before new features enter the picture.
