Jefferies analyst Edison Lee says a dramatic increase in memory costs has forced the investment bank to substantially downgrade its outlook for global smartphone shipments in 2026. The firm now expects shipments of 867 million units in 2026, representing a 31% decline versus prior-year volumes - a marked revision from an earlier forecast that anticipated a 12% fall.
The revision reflects Jefferies' supplier and channel checks showing that memory costs for average devices are accelerating far beyond previous assumptions. The bank reports that memory costs for an average Android handset would rise by roughly 3.6x year-on-year, while costs for Apple devices would increase by about 4.2x year-on-year. Those findings reverse Jefferies' earlier assumption of an 80% annual rise in memory costs.
Jefferies highlighted sharp recent moves in component pricing as the proximate cause of the revised shipment outlook. According to the bank, mobile DRAM (LPDDR5) prices climbed about 70% quarter-on-quarter and 151% year-on-year, while NAND flash prices jumped roughly 80% quarter-on-quarter and 360% year-on-year in the first quarter alone. The firm added that second-quarter price increases are likely to exceed 50% quarter-on-quarter, which it said would intensify industry-wide cost pressure.
Given the expected cost shock, Jefferies anticipates a pronounced divergence among manufacturers. The bank projects that Samsung and Apple will be the principal beneficiaries, with Samsung and Apple gaining approximately 7 percentage points and 5 percentage points of market share, respectively. Jefferies points to Samsung's secured memory supply as an advantage and to Apple's ability to rely on a less price-sensitive customer base.
By contrast, Jefferies warned that several Chinese original equipment manufacturers will experience steep volume declines. The bank flagged Xiaomi as particularly vulnerable because of the brand's dependence on lower-end models, estimating a 55% fall in Xiaomi's 2026 shipments, which Jefferies said would be partly offset by a 31% rise in average selling price. Other large Chinese OEMs - OPPO, vivo and Transsion - are expected to see shipment volumes decline in the range of 45% to 52%.
Jefferies concludes that the surge in memory prices would tend to increase the market share of Samsung and Apple the most, while Chinese OEMs would be the largest losers in terms of shipment volumes. The bank's analysis centers on component-cost pass-through and demand sensitivity across different price tiers and customer segments.
Contextual summary: Jefferies attributes the revised global shipment forecast to substantial quarter-over-quarter and year-over-year increases in LPDDR5 and NAND pricing, and forecasts significant market-share shifts driven by memory supply guarantees and differences in customer price sensitivity.