New smartphone sales are collapsing as soaring prices push millions of buyers toward refurbished devices in 2026 | Daily Reports Online
- Analyst report claims primary smartphone market is expected to decline 14.8% in 2026
- Entry level smartphone prices have already risen more than 50% this year
- Refurbished smartphone sales grew 4% year-on-year during the first quarter of 2026
The global smartphone market is heading toward a difficult 2026 as rising component costs force manufacturers to increase device prices, new research has claimed.
New findings from FDM CCS Insight note the primary smartphone market is expected to decline by 14.8% in 2026 as memory shortages continue affecting production.
The decline follows a 4.4% year-on-year contraction in the primary smartphone market during 1Q26, despite manufacturers and retailers building inventory earlier.
Memory shortages push buyers toward refurbished smartphones
As consumers search for cheaper alternatives to new devices, the demand for refurbished smartphones is expected to increase but so is the price.
FDM CCS Insight reports that some entry-level smartphones have already experienced price increases exceeding 50% compared with the previous year.
“Many consumers will hold onto their phone for longer, and these effects will be much more pronounced for consumers buying phones under $500,” said Ben Hatton, Research Analyst at FDM CCS Insight.
“Some consumers will need a new phone…and so we do expect more demand for refurbished smartphones as many are priced out of the new device market.”
The memory shortage driving these price increases is largely attributed to surging demand from AI data centers and AI-accelerated computing infrastructure.
These facilities compete for the same DRAM and NAND flash production capacity that smartphone manufacturers depend on, leaving less supply available for consumer devices.
Memory components now represent more than 30% of the bill of materials for some smartphones, increasing pressure on manufacturers.
The impact is expected to continue to affect low- and mid-range devices as companies adjust pricing strategies throughout the year.
The secondary smartphone market has already started benefiting from changing consumer behaviour, with organized sales increasing by 4% year-on-year during 1Q26.
FDM CCS Insight forecasts this market segment will expand by 15.4% globally during 2026 as demand shifts away from new devices.
However, stronger demand could also create higher refurbished smartphone prices as available supply struggles to match consumer interest.
Supply challenges could determine refurbished market growth
The refurbished market faces a major challenge because expanding supply depends heavily on trade-ins, buybacks, and upgrade programmes.
FDM CCS Insight expects premium smartphones, particularly devices priced above $750, to continue driving much of the available trade-in supply.
These devices are less affected by current pricing pressures, allowing manufacturers and retailers to maintain stronger upgrade incentives.
“The secondary market has an opportunity to serve some of the demand that will be unfulfilled by the primary market. The major challenge in the near term is to grow supply during a fallow period of flagship launches,” Hatton said.
“Countries with mature trade-in programmes will be in a much stronger position to capitalize on this opportunity and maintain higher growth rates in the secondary market over the rest of the year.”
The shift suggests that consumers may increasingly evaluate refurbished smartphones as alternatives when new device prices continue rising.
“Demand continues to heavily outweigh supply in the global secondary market. Trade-in discounts, early upgrade offers and more-lucrative trade-in promotions will be key to unlocking the market’s full growth potential in 2026 and 2027,” he added.
Whether this trend produces sustained growth will depend on supply availability, pricing stability, and how manufacturers respond to changing market conditions.
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