Apple and Samsung Tighten Their Grip as Phone Market Shrinks

A shrinking market, a growing duopoly

Apple and Samsung’s growing dominance in the global smartphone market refers to their rising combined smartphone market share and pricing power even as total worldwide phone shipments decline, driven by a memory chip shortage that is pushing competitors out of the affordable and mid-range segments.

Global smartphone shipments fell 4% year over year in the second quarter of 2026, yet Apple and Samsung moved in the opposite direction. Samsung stayed on top with 22% smartphone market share, while Apple hit a record 20% in what is usually its weakest quarter. In other words, the smartphone market is shrinking, but the biggest brands are growing inside it. That is not a healthy sign of competition; it is a warning that the market is consolidating around a premium phone market that serves the most profitable customers first and everyone else later—if at all.

Why Apple and Samsung are winning while others retreat

Apple and Samsung are not just lucky beneficiaries of a downturn; they are structurally advantaged in a crisis built around components and pricing. The ongoing global memory chip shortage has driven component costs sharply higher, and memory plus storage now account for more than 60% of the bill of materials for budget smartphones and more than 30% for high-end models. When memory alone eats this much of the parts cost, only the largest, highest-margin players can absorb the shock.

Apple rode one of the strongest iPhone 17 upgrade cycles in its history and, crucially, kept prices stable while many rivals were forced to raise theirs. Samsung, meanwhile, benefited from strong supply and a boost in premium demand tied to the delayed Galaxy S26 launch, helping it maintain that 22% share. Several Chinese brands responded by shrinking their lineups and increasing prices, and the steepest volume drops hit sub-$400 devices, where supply constraints and thin margins collide. The result: the middle of the market is hollowing out.

How consolidation hits buyers: fewer choices, higher pressure

For ordinary buyers, the headline story is not that Apple now holds 20% and Samsung 22%; it is that the rest of the field is being squeezed into irrelevance. Xiaomi, OPPO, and vivo still sit in third to fifth place with 11%, 10%, and 8% smartphone market share respectively, but they face a rough landscape as demand for sub-$400 devices plummets and supply stays tight. As vendors shift focus to high-end phones to protect margins, consumers are being squeezed.

This is already changing buyer behavior. Many budget-conscious users are expected to delay purchases, seek financing, or move to the refurbished market instead of buying new. According to Omdia, seasonal demand surges will run into constrained memory supply over the next two quarters, pushing more brands toward higher-priced devices while leaving fewer options for price-sensitive buyers. In effect, the premium phone market thrives while the entry-level segment withers.

Brand loyalty or lack of alternatives?

It is tempting to view Apple Samsung dominance as a simple story of brand loyalty, and to some extent it is. Apple managed to grow in a period that is usually slow for iPhones, something loyalty and ecosystem lock-in clearly support. Samsung has stayed top of the charts while also gaining ground in the budget segment as rivals pulled back. But loyalty alone does not explain the current shift; pricing pressure is doing a lot of the heavy lifting.

Most mid-range competitors have had to raise prices to keep up with soaring memory costs, while Apple “benefited from stable pricing while most competitors were forced to raise their pricing.” When a mid-range phone costs more but still carries a weaker brand and smaller ecosystem, many buyers decide to stretch for an iPhone or a flagship Galaxy—or hold on to their current device longer. That dynamic feeds a feedback loop: mid-tier brands lose volume, lose bargaining power on components, then cut even more models or raise prices again. The duopoly strengthens not because it innovates dramatically more, but because it can afford to wait out the storm.

What comes next: a tougher road for value seekers

The uncomfortable truth for buyers is that this is not a short-term blip. Memory prices are not expected to normalise until at least the second half of 2027, and Omdia expects them to stay elevated, keeping cost pressure high. That means the smartphone market decline in lower segments and the shift toward more expensive models will likely continue, not reverse.

In the near term, the practical advice is blunt: if you want a truly affordable new phone, your options will narrow, and you may need to compromise on features or brands. Refurbished devices and longer upgrade cycles will make more sense for many people, especially as more vendors chase the premium phone market where Apple and Samsung set the pace. Unless smaller players find new ways to cut costs without gutting quality—or regulators start caring about a de facto duopoly—buyers should expect less choice at the low end and more power concentrated at the top.