The supply chain shock has created a bifurcated market. While phone manufacturers and their chip suppliers struggle with declining volumes, memory producers are reporting record-breaking financial results. IDC analysts previously warned that the aggressive buildout of AI data centers has forced chipmakers to prioritize high-margin components, leaving the mobile sector to contend with supply scarcity and rising expenses.

Counterpoint Research data highlights the uneven impact on major brands. Samsung maintained a 23% market share despite a 3% shipment decline, while Apple captured 22% of the market. Conversely, Xiaomi, OPPO, and vivo faced steeper losses, with shipments falling between 20% and 30%. Consumers are increasingly opting to retain their existing devices longer, a trend particularly visible in China, where shipments dropped 15.4% during the quarter.

Corporate earnings reflect this divide. Micron Technology reported record fiscal 2026 revenue of $133.19 billion, bolstered by its mobile and client business unit. In contrast, Qualcomm reported a 20% decline in handset chip revenue, citing a challenging supply environment. Arm Holdings, which powers the architecture of most modern smartphones, noted that while data center demand remains robust, the softness in the handset market has forced a downward adjustment in their full-year royalty growth expectations.