THROUGH THE LOOKING GLASS: The smartphone market was already heading for a brutal 2026 thanks to the AI-driven memory shortage. Now, IDC says the situation is going to be even worse, with the US-Iran war adding enough pressure to push the industry toward its steepest annual decline on record.
According to IDC's latest Worldwide Quarterly Mobile Phone Tracker, global smartphone shipments are forecast to fall 13.9% year over year in 2026 to 1.09 billion units. That's worse than the 12.9% decline that the company predicted in February, and it would leave the market at its lowest shipment total since 2013.
It shouldn't come as a surprise to hear that the memory shortage remains the biggest problem. AI data centers keep soaking up vast amounts of DRAM and NAND, pushing prices higher and forcing phone makers to reevaluate what they can build and sell profitably. The same squeeze has already been hammering PC makers, SSD buyers, and other consumer hardware categories.
But IDC says the US-Iran war has exacerbated the situation. The blockade of the Strait of Hormuz has sent oil and gas prices higher, raising the cost of shipping components. Freight and insurance costs are also rising, making cheaper phones even harder to justify.
