The global smartphone market declined at a record level in Q3 2026 according to the latest figures from IDC, with shipments dropping 22% due to the ongoing AI-led memory crisis.

The research company found shipments fell at the highest year-on-year level of any quarter to date, shrinking to 255.3 million units.

Nabila Popal, senior research director at the research company, said the sharp downturn the industry had been bracing for “finally materialised”, and warned the worst is yet to come.

“Current indicators suggest that market has not yet reached the bottom. Memory costs have surged approximately 350% since last year and are still rising, creating substantial pressure on vendor margins and shipments.”

She added while memory inflation is beginning to slowdown, “costs remain elevated across other critical components as well, compounding the crunch”.

To that end, market growth is expected to be constrained through 2027 and any possible recovery pushed to 2028 at the least.

Individual vendor rankings remained similar to the last quarter. Samsung and Apple continued to gain market share with 22.6% and 22.4% respectively, even though both companies’ quarterly shipments dropped.  

Rounding out the top five companies, Xiaomi, Vivo and Oppo all experienced double-digit market share drops.

Kiranjeet Kaur, associate research director for Worldwide Devices at IDC, added despite sluggish sales some vendors raised production plans ahead of an expected tightening in component supply next year.

“If demand remains weak, this could lead to inventory build-up heading into 2027, adding a further downside risk to our 2027 forecast,” she said.

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Ericsson posted a healthy Q3 2026 revenue rise with its performance boosted by higher sales in its Network division and effective efficiency measures, although new CEO Per Narvinger (pictured) warned of potential headwinds over the next year.

Overseeing his first results announcement since taking the helm from Borje Ekholm last month, former Networks chief Narvinger said he spent the quarter meeting customers and a consistent theme emerged: “the need for more intelligent and autonomous networks to improve performance, efficiency, robustness and resilience.”

Looking ahead, he added: “the RAN market is flat, geopolitical uncertainty remains elevated, and component costs are a headwind to gross margin next year.”

Narvinger believes through disciplined actions and prioritising technology leadership, the company remains well positioned “to navigate these challenges and deliver profitable long-term growth”.

Revenue for the period rose 6% year-on-year to SEK59.5 billion ($6 billion), with sales from Networks up 9% to SEK38.7 billion. Cloud Software and Services increased 3% to SEK15.8 billion, while Enterprise sales dropped 10% to SEK4.6 billion, reflecting the divestment of iconectiv.

Breaking out geographical markets, sales grew in most markets including Asia and Europe, but offset by the Americas with struggles in Latin America.

IPR licensing revenue hit SEK3.9 billion from SEK3.1 billion, driven party by retroactive revenue to previously unlicenced products.

Net income declined 49% to SEK5.8 billion.

Group restructure
Alongside the results announcement, the Swedish vendor outlined a revamped group structure, intended to utilise its R&D capabilities and target cost efficiencies.

The revamp will see a new Asia-Pacific Market Area established from the start of 2027, combining Market areas North East Asia and South East Asia, Oceania and India. It claims this will enable Ericsson to operate more effectively across the region.

The division will be headed by Patrick Johansson, currently boss of Market Area Europe, Middle East and Africa. A process has started for his successor in EMEA.

It is also shaking up Business Area Enterprise Wireless Solutions to put more focus on indoor solutions, while moving the current portfolio of the unit to other parts of Ericsson, including Networks.

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