Fewer Phones, More Money: Smartphone Market Value to Hit $651.6 Billion Despite 12% Shipment Drop
Global smartphone shipments are set to fall to 1.097 billion units in 2026, but a sharp shift toward more expensive devices is expected to push the industry’s value higher, according to Omdia.
The research firm expects worldwide smartphone shipments to decline 12% year-on-year in 2026, weighed down by weakening demand for entry-level devices and growing affordability pressures in emerging markets.
Yet the decline in volumes tells only half the story. Omdia forecasts the total value of smartphones sold globally will rise 12% to $651.6 billion, while the average selling price jumps 27% to $594.
The contrasting figures point to a significant restructuring of the smartphone market: manufacturers could sell considerably fewer devices while generating more revenue from each one.
The cheap smartphone is losing ground
The biggest change is happening at the bottom of the market.
Smartphones priced below $200 accounted for 40.6% of global shipments in 2025, but Omdia expects their share to shrink to just 25.6% by 2027, a decline of 15 percentage points in two years.
The cheapest devices face an even steeper contraction. Phones priced below $100 are expected to fall from 12.6% of shipments in 2025 to only 3% in 2027, with unit shipments in the ultra-budget category dropping by 81%.
At the opposite end, smartphones costing more than $800 are forecast to increase their share from 21.1% in 2025 to 28.4% in 2027.
By next year, Omdia expects $800-plus smartphones to account for a larger share of global shipments than all smartphones priced below $200 combined.
Mid-range models priced between $200 and $699 are expected to remain comparatively stable, accounting for around 40% to 41% of shipments.
Why are consumers buying fewer phones?
Omdia identifies several forces behind the change.
Replacement cycles are getting longer as consumers hold on to smartphones for more years. Longer software-support commitments are also making devices usable for longer, while improvements between successive generations have become less dramatic.
At the same time, the second-hand and refurbished smartphone market is expanding, giving consumers the option of buying an older premium phone instead of a new entry-level device at a similar price.
Component costs are adding another layer of pressure, particularly in emerging economies where household purchasing power has not increased as quickly as smartphone prices.
That makes financing, installments and operator subsidies increasingly important to maintaining access to new smartphones.
Manufacturers are choosing profit over volume
There is also a strategic shift among smartphone makers themselves.
Rather than competing primarily to maximize unit shipments and market share, vendors are placing greater emphasis on higher-margin devices and a more profitable product mix.
“The strategic balance is shifting,” said Jusy Hong, Senior Research Manager at Omdia, noting that vendors are increasingly prioritizing sustainable growth and profitability rather than shipment share alone.
The change helps explain the apparently contradictory 2026 forecast.
A 12% decline in shipments alongside a 12% increase in market value means the smartphone industry is becoming smaller by units but significantly more expensive by value.
Omdia expects the global average selling price to rise further over the longer term, climbing from $467 in 2025 to $624 in 2027, an increase of around 33%.
For smartphone manufacturers, the next phase of competition may therefore be less about putting a new device into as many hands as possible and more about persuading existing users to spend significantly more when they finally decide it is time to upgrade.