• Goldman Sachs (GS) now sees global smartphone shipments at 1.1 billion units in 2026 and 1.2 billion in 2027 and 2028, down from its June estimate, as memory-chip costs surge.
  • Premium devices and foldables are expected to lift market value to $624 billion in 2026 and $674 billion by 2028, with foldable shipments projected at 77 million units by 2028.
  • The divergence underscores a market where value growth no longer requires volume growth, but the pain is concentrated among lower-priced Android brands.

A Smaller, More Valuable Market

Goldman Sachs lowered its global smartphone shipment forecasts, now expecting 1.1 billion units in 2026 and 1.2 billion in both 2027 and 2028. The revised outlook, down from its June estimate of 1.14 billion units in 2026, reflects a memory-chip cost and supply shock linked to AI infrastructure demand. Despite weaker volumes, higher prices and premium devices are expected to push market value to $624 billion in 2026 and $674 billion by 2028.

The immediate driver is an unusual economic mechanism: AI data-center build-outs are consuming substantial memory supply, particularly DRAM, NAND, and high-bandwidth memory. That demand has tightened supply and raised prices, leaving smartphone manufacturers—especially lower-margin brands—facing higher bills of materials and limited ability to absorb costs.

IDC’s recent actual market data reinforce the pressure. Worldwide smartphone shipments fell 7.4% year over year to 276.3 million units in Q2 2026. Samsung (005930.KS) shipped 62.7 million units and Apple (AAPL) 55.7 million, gaining share while several volume-oriented competitors weakened. IDC had previously forecast a 12.9% fall in 2026 smartphone shipments to 1.12 billion units—the largest annual decline it described in the market’s history—because rising memory prices are inflating device costs and crimping demand.

Premiumization Accelerates

Goldman remains bullish on foldables, forecasting 77 million units by 2028. That is highly optimistic relative to the current base. Omdia estimated global foldable shipments at just 17.2 million in 2025, with the category representing roughly 1.0%–1.5% of global smartphone volumes. It expects a potential inflection in 2026, forecasting 50% year-over-year growth as competition increases and flip phones become more affordable.

The gap between Goldman’s 2028 foldable target and current volumes implies a sharp multi-year acceleration. For that to happen, the industry would need meaningful improvements in affordability, durability, consumer use cases, distribution, and software experience.

Apple and Samsung are comparatively better placed because their brands, carrier relationships, scale, and premium product portfolios give them more room to pass through higher costs. IDC specifically said the low-end Android ecosystem is likely to be hit harder while Apple and Samsung gain share.

Supply Chain Ripple Effects

The pressure extends well beyond phone brands. Slower unit volumes can weigh on mobile application-processor designers, memory purchasers, display makers, camera-module suppliers, component manufacturers, contract assemblers, logistics companies, and retail channels. Higher prices can partly cushion dollar revenue, but not necessarily factory utilization or employment in volume-oriented supply chains.

Goldman’s earlier analysis projected smartphones priced above $600 to reach 402 million units by 2028, with their share of shipment value climbing materially. In contrast, it expected the mid-tier to lose share as cautious middle-income consumers defer upgrades and the segment lacks obvious breakthrough features.

“The low-end Android ecosystem is likely to be hit harder while Apple and Samsung gain share,” according to IDC. The firm’s data showed that dynamic already playing out in Q2 2026.

Regulatory and Geopolitical Crosscurrents

Smartphones are a globally interdependent product, so component scarcity and policy changes travel across borders quickly. China and East Asia remain pivotal, housing major handset brands, contract manufacturing, display and battery production, as well as much of the broader electronics supply chain.

European Union regulation is also pushing the market toward longer-lasting devices. Since June 20, 2025, smartphones and tablets sold in the EU have been subject to ecodesign and energy-labelling rules covering durability, battery life, repairability, and software support. Manufacturers must provide critical spare parts for at least seven years after a model stops being sold, while operating-system upgrades must be available for at least five years after the last unit is placed on the market.

A September 2026 iFixit review alleged that about four in five listed smartphones still lacked required repair information, showing that enforcement and compliance remain active policy issues. These rules may reduce replacement demand over time by making devices easier to maintain, while also imposing compliance, design, documentation, and service-cost obligations on manufacturers.

What to Watch

Near-term, expect continued pressure on entry-level and mid-range Android volumes. Higher average selling prices may keep industry revenue more resilient than shipment data suggest. Samsung and Apple are likely to remain relative share beneficiaries if smaller competitors cannot secure affordable memory supply. Foldable launches may attract attention and improve revenue mix, but the category remains niche and price-sensitive.

Long-term, if memory supply normalizes, volumes could stabilize, but the industry is unlikely to return to its old, rapid unit-growth pattern. Premium devices, AI features, longer software support, financing plans, and foldables are likely to become more important ways for manufacturers to sustain revenue.

Goldman’s foldable target would imply an unusually rapid scaling phase. The upside case rests on lower prices and genuinely useful larger-screen experiences; the downside case is that foldables remain a profitable but limited halo category because of cost, durability concerns, and weak consumer need.

Overall, the revised forecast signals a smartphone market where value growth no longer requires volume growth—but where the gains are likely to be concentrated among premium brands and memory suppliers, while price-sensitive consumers and lower-margin manufacturers bear most of the adjustment.

Correction: An earlier version of this article misstated the percentage decline in Q2 2026 smartphone shipments. It was 7.4%, not 7.2%.