Goldman Sachs cuts smartphone forecasts as memory costs squeeze demand

Goldman Sachs Cuts Smartphone Shipment Forecasts as Memory Costs Squeeze Demand

Goldman Sachs has lowered its global smartphone shipment projections for 2026 and 2027, citing persistently high memory chip prices that are suppressing consumer demand and reshaping the industry toward premium devices.

Revised Forecasts

The investment bank trimmed its global smartphone volume estimates by 4% and 3% for 2026 and 2027, now projecting 1.14 billion and 1.17 billion units respectively. The revised outlook implies a 10% drop in shipments for 2026, followed by a 3% recovery the following year — a steeper decline than Goldman’s earlier forecast of a 6% contraction and 2% rebound. The firm also introduced a 2028 estimate of 1.18 billion units, representing 1% year-over-year growth.investing

The bank attributed its more cautious stance to escalating memory chip prices, driven by intense demand from the artificial intelligence sector that has strained supply chains and pushed major memory producers to prioritize AI customers over mobile device makers. Despite lower volumes, Goldman expects the smartphone market’s total value to grow 3% to $596 billion in 2026, followed by 2% growth in both 2027 and 2028, reaching $606 billion and $621 billion respectively.investing

Premium Shift Accelerates

The market for premium smartphones priced above $600 is expected to grow at a compound annual growth rate of 5%, reaching 402 million units and comprising 34% of total shipments, up from 29% in 2025. This trend echoes findings from IDC, which forecast in May that global shipments would fall 13.9% in 2026 to 1.09 billion units — what would be the steepest annual contraction in smartphone history — while average selling prices rise to a record $550.idc

Budget Phones Bear the Brunt

The cost pressures are already claiming casualties at the lower end of the market. Nothing co-founder Akis Evangelidis confirmed on X this week that the company has canceled the next CMF Phone, its budget-friendly line. “We were working on a successor but with memory prices where they are right now, we can’t build a phone that feels like a genuine step forward at a price that makes sense for CMF,” Evangelidis wrote. The CMF Phone 3 Pro was originally on the company’s development roadmap for 2026.9to5google

The memory crisis extends well beyond smartphones. IDC expects supply challenges to persist throughout 2026 and into 2027, with no return to 2025 pricing levels within its forecast horizon.idc