Geopolitical conflicts and the shift of chip fabrication toward AI are pushing many smartphone models priced under $150 to the brink of obsolescence.
The global market for traditional mobile phones is currently experiencing its steepest decline. This situation is due to the conflict with Iran, which has worsened the shortage of electronic chips.
On June 1, Counterpoint Research forecast a 13.9% drop in global smartphone shipments for this year, to 1.08 billion units. The impact of this supply crisis is currently most visible in the entry-level phone segment.
Chip manufacturers are redirecting their production capacity toward chips that support artificial intelligence (AI), which makes the production of traditional phones less profitable.
Some models of phones under $150 could even disappear from the market. This year, manufacturers in the entry-level phone segment are expected to reduce their shipments: Transsion by 32%, Xiaomi by 28%, and Honor by 20%.
Meanwhile, the high-end smartphone segment has shown greater resilience to market fluctuations.
Apple posted record revenue in the first quarter of this year, thanks to strong consumer demand for upgrades to the iPhone 17 lineup.
Counterpoint expects iPhone shipments to remain steady in 2026 before rising 5% the following year. Benefiting from a more stable chip supply and profit margins significantly higher than those of many competitors, Apple is considered well positioned to increase its market share and be less susceptible to pressure to raise prices.
Samsung Electronics has also maintained stable production in the first quarter. Counterpoint forecasts that the company’s phone shipments for the full year will fall by only about 4%, a decline well below the market as a whole, thanks to a stable offering and a relatively balanced product range.
