Smartphone markets face shifts amid chip shortages and rising AI demand

The global smartphone market is experiencing significant shifts driven by component shortages and changing consumer preferences. In Europe, shipments fell 10% year-over-year in Q2 2026 to 35 million units, marking a three-year low. Despite this contraction, Apple and Samsung have maintained strong positions, each capturing 34% of the European market share, while Chinese brands like Xiaomi and Oppo have lost ground.

In India, the market is facing a 'RAMpocalypse'—a global shortage of memory and storage chips fueled by AI data center demand. This has hit budget segments hardest, causing double-digit shipment declines for brands such as Vivo, Realme, and Xiaomi. However, Indian consumers are shifting their focus toward experience-driven choices. An Amazon survey indicates that 82% of Indian buyers now prioritize AI features, such as contextual assistance and generative photo editing, alongside traditional requirements like battery life and performance.

Overall, while rising component costs and inflation are driving up device prices and reducing promotions, premium brands like Apple continue to show resilience by capturing high-end demand in various regions.