The decline in shipments is driven by a shortage of memory chips and record-high prices.
"Memory chip prices have risen nearly 300% over the past year, now accounting for more than 65% of the cost of low-end devices, making survival increasingly difficult for manufacturers with affordable lineups," said Nabila Popal, senior research director at IDC. She added that the memory crisis favors premium players and works against suppliers in the lower price segment.
For the second consecutive quarter, Apple Inc. and Samsung have shown resilience, remaining the only top-five suppliers to post sales growth, she noted. Apple achieved record results in Q2 thanks to the success of the iPhone 17 and concerns over upcoming price increases.
"This crisis has split the smartphone market into two parts," said Francisco Jeronimo, vice president of global client devices at IDC. "At the top are Apple and Samsung."
They are pulling away from other companies, partly because they sell devices where memory chips account for a smaller share of the cost. "At the bottom, manufacturers focused on cheap, mass-market devices are suffering, and so are their customers," the expert said.
