Global smartphone shipments fell 20% in the third quarter to their lowest level for the period since 2012, as AI data centers soak up memory chips, according to Counterpoint
GLOBAL SMARTPHONE SHIPMENTS PLUNGE 20% AS AI BOOM SQUEEZES CHIP SUPPLY Global smartphone shipments fell 20% in Q3, hitting their lowest third-quarter level since 2012, according to Counterpoint Research. AI data centers are absorbing memory chip supplies, driving up smartphone production costs and retail prices. Samsung leads with 23% market share, followed closely by Apple at 22%. Meanwhile, Xiaomi shipments plunged over 30%, as manufacturers prioritize margins over sales volumes.
Context
This is one of the clearest signs yet that the AI buildout is raising costs for consumer electronics by competing for the same memory chips.
The post relays preliminary estimates from Counterpoint Research, a market research firm, which Reuters also reported on October 12. The figures are preliminary and could be revised.
Deep dive
On October 12, DeItaone posted that global smartphone shipments fell 20% in Q3, hitting their lowest third quarter level since 2012, according to Counterpoint Research, and that AI data centers are absorbing memory chip supplies.
Reuters, as republished by BusinessDay, reported that shipments fell 20% year on year because soaring memory chip costs and supply shortages pressured manufacturers and pushed up prices. Counterpoint senior analyst Shilpi Jain said consumers are holding on to their devices longer than estimated, increasingly considering refurbished devices and prioritising higher value devices.
According to Mexico Business News, which summarized the report, Samsung kept the top spot with 23% market share while Apple reached 22%, its first third quarter above 20%. Ground News summaries said retail prices rose about 20% as manufacturers favored profitability over volume, and that Samsung's own shipments fell 3%.
The post's figure of a Xiaomi decline of over 30% did not appear in the coverage reviewed here, so it is unconfirmed.
What to expect next
Watch for final third quarter figures from Counterpoint, IDC and Canalys to see whether the 20% drop holds, and for Xiaomi's own numbers.
Also watch memory contract prices for DRAM and NAND, holiday phone pricing, and whether phone makers keep cutting volume to protect margins while AI data centers absorb supply into next year. A rebound in the fourth quarter would suggest the drop was a supply squeeze rather than weaker demand.