The global smartphone market is facing a historic decline: Global smartphone shipments are set to fall -13% YoY in 2026, or -160 million units, to ~1.1 billion, according to IDC. This marks a sharp drop from a +2% growth in 2025 and +6% in 2024. The decline is being driven by an unprecedented memory chip shortage that is inflating component costs across the industry. As a result, smartphone makers are discontinuing unprofitable entry-level models and pushing consumers toward higher-priced devices. Last year, ~170 million smartphones shipped for under $100, a segment currently uneconomical to maintain. The shortage is expected to persist into mid-2027, and even when supply returns, memory prices are unlikely to fall back to 2025 levels. The days of cheap smartphones are over.(The Kobeissi Letter)