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Global smartphone sales suffered their sharpest decline in over a decade, as a result of rising hardware costs driven by the unprecedented artificial intelligence boom.
data out International Data Corporation (IDC) shows that global smartphone shipments fell by 22% in the third quarter, to 255 million phones – the worst performance since 2013..
The severe contraction is driven by skyrocketing component costs, especially memory chips. Massive demand from AI data centers training and running complex models has driven memory prices up by as much as 350% this year.
Because memory accounts for up to half of a smartphone’s manufacturing cost, major chip suppliers have prioritized the profitable AI infrastructure components over consumer electronics..
The decline is reflected across the globe. In China, smartphone shipments fell 15.4% year-on-year to 57.9 million units in the third quarter, marking a sixth consecutive quarter of contraction.
With weak consumer spending and rising retail prices, Huawei emerged as the only major vendor to post double-digit growth in Chinacaptures a 21% market share with 12.2 million units shipped. Meanwhile, rival brands including Apple, Xiaomi, Vivo, and Oppo experienced shipments down.
As higher costs hit store shelves worldwide, analysts note that consumers are increasingly holding on to their existing devices longer, extending replacement cycles. With memory prices continuing to rise, IDC warns that the widespread sales slump is likely to persist well into next year.
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