Apple and Samsung win big.

The global smartphone market contracted by 4.1% year-on-year in the first quarter of 2026, ending a 2.5-year streak of growth, according to the latest report from IDC . The main reason is the memory chip crisis, which is forcing most manufacturers to raise retail prices, driving down demand sharply in price-sensitive markets. Meanwhile, Apple and Samsung have been less affected thanks to their high profit margins.

"The smartphone market is entering one of its most challenging phases, driven by a severe memory chip shortage directly impacting both shipments and demand. The current 4% decline is just a small sample of what will come as the memory chip situation continues to worsen," IDC warned in its report.

In emerging markets, smartphone prices have increased by 40-50% as many companies pass on memory chip costs to consumers, creating a significant demand shock. Most mainstream Android brands operate with thin profit margins, leaving little room to absorb the increased costs.

Against this backdrop, Apple and Samsung emerged as the only two giants in the top 5 still recording positive growth. Samsung increased by 3.6% thanks to stable demand for its flagship line. Apple increased by 3.3% with a strategy of keeping the iPhone 17's price unchanged, leveraging the high profit margins of this model to absorb the increased memory chip costs without passing them on to consumers.

However, Samsung's advantage over Apple may be narrowing quickly. On April 14th, Samsung announced price increases for several models, including the Galaxy Z Flip7, Galaxy S25 Edge, and Galaxy S25 FE, along with most of its Galaxy tablets. For high-end devices, Samsung did not increase the starting price but raised the price of versions with larger storage by $40-$80 .

If Apple continues to keep prices the same while Samsung and other competitors raise them, the iPhone could become a more competitive option in many markets.

A separate analytical report published on the same day suggested that Apple is deliberately sacrificing some profit margins to prioritize market share growth, taking advantage of the difficulties many Android competitors are facing. This is an unusual strategy for Apple, a company known for its tight control over profit margins.

IDC forecasts that the situation will continue to worsen in Q2 2026, with memory chip prices projected to increase by another 30% compared to Q1. Companies focused on the low-price segment with thin profit margins will face the heaviest pressure, while Apple and Samsung will continue to consolidate their positions in the high-end segment.