The smartphone market is having a rough year, and the latest report says the third quarter was the worst in 14 years. Reuters reported on October 12, 2026 that global smartphone shipments recorded their weakest July-to-September period since 2012, with the memory-chip crunch named as the main cause. If you have noticed phones getting pricier or specs getting trimmed, this is the reason.

We could not open the full Reuters story, so this article sticks to the headline finding and the widely reported background from analysts. Where exact Q3 figures are not available to us, we say so.

What Is Behind the Slump?

The root cause is memory. Demand from AI data centres has pulled RAM and storage chips toward servers, pushing prices up for everyone else. Phone makers buy the same type of memory, so their costs have jumped. Earlier in the year, research firm IDC forecast that 2026 shipments would fall 12.9%, from about 1.26 billion devices in 2025 to about 1.12 billion, the biggest annual drop in more than a decade. See the background on the DRAM Wikipedia page and IDC’s own research at idc.com.

Key Numbers at a Glance

Item	Figure	Source / status
Q3 2026 shipments	Worst third quarter in 14 years	Reuters headline, Oct 12, 2026
IDC 2026 forecast	-12.9% (1.26bn to 1.12bn units)	IDC forecast, Feb 2026
Average selling price	Up 14% to a record $523	IDC forecast
Counterpoint view	About 12% dip in 2026; sub-$200 phones down 20%	Counterpoint forecast
Memory price relief	Expected around mid-2027	IDC forecast

Why Prices and Specs Are Shifting

When memory gets expensive, brands have two choices: raise prices or cut features. Several Android makers raised prices by 10% to 20% in January, and Nothing’s chief executive Carl Pei said some brands might need increases of 30% or more, or spec downgrades. We have already covered the knock-on effects, including smartphone price hikes across brands.

Cheaper phones are hit hardest. Analysts say sub-$200 devices could fall around 20%, and IDC warned that sub-$100 phones may become permanently uneconomical. Premium phones are more resilient because their buyers are less price-sensitive and their margins absorb more of the cost. Regionally, IDC expected the steepest falls in the Middle East and Africa, with China and Asia Pacific also down.

What It Means for Indian Buyers?

India is a budget-heavy market, so the squeeze matters here. Expect fewer ultra-cheap launches, smaller RAM and storage bumps, and more price tweaks around festive sales. Buyers who need a phone soon may find current discounts better than next year’s launches. Second-hand and refurbished phones may also gain popularity, something Counterpoint has flagged. If you are comparing models, look closely at the RAM and storage variants, because that is where makers are quietly trimming.

What Is Not Confirmed?

Several details are not confirmed in what we could verify:

The exact Q3 2026 shipment total, the year-on-year percentage and the research firm behind the Reuters figure.
Brand-by-brand rankings for the quarter.
Whether the forecasts above have since been revised.
The timing of any price relief, as the mid-2027 view is a forecast.

Quick Answers

Why are shipments falling? Memory chips are scarce and expensive because of AI demand.

How bad is it? Reuters calls it the worst third quarter in 14 years.

Will phones get more expensive? Analysts expect higher average prices, with a record $523 average forecast by IDC.

When will it improve? IDC expects memory prices to stabilise around mid-2027.

The Bottom Line

A record-weak quarter in a year of rising prices confirms that the memory crunch is reshaping the phone market. Watch for official Q3 figures from IDC, Counterpoint and Canalys, which will give the full ranking and numbers, and for how brands price their next flagship launches.

Source: Reuters report (October 12, 2026), with background from IDC and Counterpoint forecasts. Details are as reported; check the original reports for exact figures.