{"id":66745,"date":"2026-04-15T19:37:50","date_gmt":"2026-04-15T17:37:50","guid":{"rendered":"https:\/\/www.apfelpatient.de\/?p=66745"},"modified":"2026-04-15T19:40:06","modified_gmt":"2026-04-15T17:40:06","slug":"the-smartphone-market-is-shrinking-but-apple-is-still-growing","status":"publish","type":"post","link":"https:\/\/www.apfelpatient.de\/en\/news\/smartphone-markt-schrumpft-apple-waechst-trotzdem","title":{"rendered":"Smartphone market shrinks \u2013 Apple's pricing strategy pays off"},"content":{"rendered":"

The global smartphone market contracted by over 4 percent in Q1 2026, ending two and a half years of growth. Apple is among the few manufacturers that still managed to increase sales \u2013 thanks to stable prices, while the competition raised them.<\/strong><\/p>\n\n\n\n

The global memory chip shortage is now hitting the smartphone market hard. According to IDC<\/a>, global smartphone shipments fell by 4.1 percent year-over-year in the first quarter of 2026 \u2013 marking the end of a two-and-a-half-year growth period. And it's getting worse: IDC expects the situation to worsen in the coming quarters. For Apple, however, the downturn seems to be more of an opportunity than a problem.<\/p>\n\n\n\n

The cause of the market slump is clear: Rising memory chip prices \u2013 in some cases by over 100 percent \u2013 are forcing most smartphone manufacturers to pass the costs on to consumers. In some emerging markets, smartphone prices have risen by 40 to 50 percent, which is massively dampening demand. Apple, on the other hand, has kept its prices stable so far \u2013 and is profiting from this.<\/p>\n\n\n\n

Apple and Samsung are growing \u2013 but differently<\/h2>\n\n\n\n

IDC notes that both Apple and Samsung increased their shipments in Q1 2026: Samsung by 3.6 percent and Apple by 3.3 percent year-over-year. Both companies have sufficiently high margins on their premium devices to absorb the increased component costs without raising prices.<\/p>\n\n\n\n

However, Samsung yesterday raised prices for several devices \u2013 including the Galaxy Z Flip 7, the Galaxy S25 Edge, and the Galaxy S25 FE, as well as almost all current Galaxy tablets. The increases primarily affect storage upgrades and range from $40 to $80 per device. This could leave Apple as the only major manufacturer to keep its smartphone prices unchanged.<\/p>\n\n\n\n

Apple's conscious decision<\/h2>\n\n\n\n

The IDC data confirms what analysts predicted last week: Apple is deliberately accepting lower hardware margins<\/a> to gain market share in the current market environment. This strategy isn't just working for the Mac \u2013 it's also proving effective for the iPhone. According to Counterpoint, Apple was the smartphone market leader for the first time<\/a> in a first quarter in Q1 2026, increasing its market share to 21 percent.<\/p>\n\n\n\n

The rationale behind this is that every new iPhone user is a potential subscriber to Apple Music, iCloud+, Apple TV, and other services. The high margins in the services business compensate for the short-term decline in hardware margins.<\/p>\n\n\n\n

What happens next<\/h2>\n\n\n\n

IDC warns that the decline in Q1 is just a taste of what's to come. The memory chip situation is likely to worsen in the coming quarters and could persist until the end of 2027. For manufacturers with thin margins\u2014that is, most Android vendors\u2014this means further price increases, declining demand, and shrinking production volumes.<\/p>\n\n\n\n

Apple is in the unusual position of being able to grow in a shrinking market. The sustainability of this strategy will be revealed in the earnings report<\/a> on April 30th \u2013 that will show for the first time just how much pressure margins are actually under. (Image: Shutterstock \/ Wongsakorn 2468)<\/p>\n\n\n\n