Omdia: The global smartphone market is expected to shrink by 12% in 2026, and the market structure is skewed towards the higher price segment

The Zhitong Finance App learned that Omdia's latest research shows that the global smartphone market is expected to drop 12% year on year in 2026, with shipments falling to 1,097 million units. This is mainly due to weak demand for entry-level devices and purchasing power challenges in emerging markets holding back shipments. Despite the decline in shipments, the total value of shipments in the global smartphone market is expected to increase by 12% to reach US$651.6 billion, while the average selling price (ASP) will rise 27% to US$594.

At the same time, the price range structure of the global smartphone market is undergoing significant changes. The share of smartphones under $200 in global shipments will drop from 40.6% in 2025 to 25.6% in 2027, a drop of about 15 percentage points within two years. Over the same period, the market share of high-end smartphones of $800 and above is expected to increase from 21.1% to 28.4%; the average global smartphone price will rise from $467 to $624, an increase of 33%.

This change is happening simultaneously across multiple price ranges. The market share of the ultra-low end under $100 is expected to drop sharply from 12.6% in 2025 to 3.0% in 2027; products between $100 and $199 will drop from 28.0% to 22.6%. Mid-range smartphones between $200 and $699 are expected to maintain about 40% to 41% of the market share; models priced at $700 and above are expected to account for about one-third of global shipments.

Jusy Hong, senior research manager at Omdia, said: “We are seeing significant changes in the global smartphone price pyramid. The bottom of the market, which is heavily based on affordable products, is narrowing, while the market share of the high-end price segment is expanding. By 2027, high-end shipments over $800 are expected to account for more than the sum of smartphones under $200. These current changes are likely to impact smartphone product portfolios, pricing strategies, and consumer choices over the longer term.”

Omdia points out that five major structural factors are driving this transformation: the lengthening of the smartphone usage cycle, the continued expansion of the used and refurbished smartphone market, increasing pressure on consumer budgets, increasing pressure on the consumer budget, and the increasing maturity of smartphone technology while pursuing scale. Together, these factors influence the size and composition of the global smartphone market.

Smartphone usage cycles have been extended, and demand for switching has slowed

The smartphone switching cycle is breaking through past historical levels and is expected to continue to be extended until 2027 and beyond, thereby reducing the demand for new devices every year. Major manufacturers' ongoing efforts to extend software support commitments are also changing the value proposition of products. Compared to low-cost devices with shorter support cycles, the long-term use value of high-end smartphones may be further enhanced as a result.

Increased smartphone performance has also reduced the urgency for consumers to upgrade their devices. Older flagship models can still provide an excellent user experience, and advances in battery technology and increased consumer environmental awareness have further extended the replacement cycle. As consumers spend more and more time using smartphones, annual switching demand is likely to decline as well.

The used and refurbished smartphone market continues to expand

The used smartphone market, which includes used and refurbished devices, has continued to grow before, and the continued rise in the price of new models has further fueled this trend. The previous generation of high-end flagship products could provide consumers with an alternative at a similar price level.

Trade-in, official refurbishment, and second-hand resale programs launched by Apple, Samsung, and major carriers are also driving the development of this market. These programs often include device testing, parts replacement, warranty, and discounted pricing, so more consumers can buy high-end smartphones at a lower cost. Apple's leasing program in the US may further drive this trend, making it play a more direct role in equipment recycling and residual value management.

Rising parts costs are increasing purchasing pressure in emerging markets

Rising parts costs are further increasing the pressure on consumers' purchasing power. The share of smartphone shipments under $200 is expected to drop from 40.6% in 2025 to 25.6% in 2027, a decrease of 15 percentage points within two years. Shipments of ultra-low-end smartphones that cost less than $100 are expected to drop 81%.

This pressure is particularly evident in emerging markets, where the purchasing power of local consumers has not kept pace with rising equipment prices. In Africa, India, Southeast Asia, and Latin America, higher smartphone prices may make it difficult for many potential consumers to afford new devices. As a result, installment and subsidy programs are becoming increasingly important in supporting smartphone purchases. However, the actual results vary from market to market, particularly in countries where consumer credit coverage is low.

Vendors pay more attention to profitability and product portfolio quality

Smartphone makers are paying more attention to profitability and product portfolio quality, and some are reducing investment in low-margin entry-level markets. In some cases, this means that manufacturers are willing to accept lower shipments in exchange for a healthier product mix and stronger financial performance.

“The strategic balance is changing,” Hong added. “Manufacturers are increasingly focusing on sustainable growth, healthier product portfolios, and greater profitability rather than just market share.”

Mid-range product innovation closes the performance gap with flagship models

Smartphone technology is gradually maturing, and many performance improvements have moved from past breakthrough upgrades to gradual improvements. Today's mid-range processors can provide the performance that only flagship devices had in the past, reducing the need for consumers to simply upgrade their devices for performance.

At the same time, mid-range smartphones are also increasingly equipped with features that were mainly focused on high-end products in the past. Computational photography continues to improve the shooting experience, and high-refresh rate OLED displays have gradually become popular in mid-range products. Battery life, charging speed, and airframe workmanship also continued to rise in different price ranges, further narrowing some of the actual experience gaps between mid-range and high-end devices.

Smartphone industry strategic outlook

There is a high degree of correlation between these five factors. A long equipment life cycle will increase the supply of recyclable equipment in the second-hand market, while purchasing power pressure will increase consumer demand for lower-cost alternatives. At the same time, mature technology has reduced the urgency for consumers to upgrade devices, and manufacturers' higher emphasis on profitability may further affect the supply scale and market positioning of entry-level smartphones.