- Analyst report claims that the primary smartphone market is expected to decline 14.8% in 2026
- Entry-level smartphone prices have already risen more than 50% this year
- Sales of refurbished smartphones grew 4% year-on-year in the first quarter of 2026
The global smartphone market is headed for a difficult 2026 as rising component costs force manufacturers to increase unit prices, new research has claimed.
New findings from FDM CCS Insight note that the primary smartphone market is expected to decline by 14.8% in 2026 as memory shortages continue to affect production.
The decline follows a 4.4% year-on-year decline in the primary smartphone market during 1Q26, despite manufacturers and retailers building up inventory earlier.
Memory shortage pushes buyers towards refurbished smartphones
As consumers look for cheaper alternatives to new devices, the demand for refurbished smartphones is expected to rise, but so is the price.
FDM CCS Insight reports that some entry-level smartphones have already seen price increases of over 50% compared to the previous year.
“Many consumers will hold on to their phone for longer periods of time, and these effects will be much more pronounced for consumers purchasing phones under $500,” said Ben Hatton, research analyst at FDM CCS Insight.
“Some consumers will need a new phone … and so we expect greater demand for refurbished smartphones as many are priced out of the new device market.”
The memory shortage driving these price increases is largely attributed to increasing demand from AI data centers and AI-accelerated computing infrastructure.
These facilities compete for the same DRAM and NAND flash production capacity that smartphone makers rely on, leaving less supply for consumer devices.
Memory components now represent more than 30% of the bill of materials for some smartphones, increasing the pressure on manufacturers.
The impact is expected to continue to affect low- and mid-range units as companies adjust pricing strategies throughout the year.
The secondary smartphone market has already started to benefit from changing consumer behavior, with organized sales up 4% year-on-year during 1Q26.
FDM CCS Insight forecasts that this market segment will grow by 15.4% globally during 2026 as demand shifts away from new devices.
However, higher demand may also drive higher prices for refurbished smartphones as available supply struggles to match consumer interest.
Supply challenges may be decisive for the refurbished market growth
The refurbished market faces a major challenge because expansion of supply is largely dependent on trade-ins, buy-backs and upgrade programmes.
FDM CCS Insight expects premium smartphones, particularly devices priced above $750, to continue to drive a large portion of the available trade-in supply.
These units are less affected by current price pressures, allowing manufacturers and retailers to maintain stronger upgrade incentives.
“The secondary market has an opportunity to serve some of the demand that will not be met by the primary market. The biggest challenge in the near term is increasing supply during a fallow period of flagship launches,” Hatton said.
“Countries with mature trade-in programs will be in a much stronger position to take advantage of this opportunity and maintain higher secondary market growth rates for the rest of the year.”
The shift suggests that consumers are increasingly considering refurbished smartphones as alternatives as new device prices continue to rise.
“Demand continues to strongly outweigh supply in the global secondary market. Trade-in discounts, early upgrade offers and more lucrative trade-in campaigns will be key to unlocking the market’s full growth potential in 2026 and 2027,” he added.
Whether this trend produces sustained growth will depend on supply availability, price stability and how producers respond to changing market conditions.
Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews and opinions in your feeds.
