Apple Inc. (AAPL) might be riding high on iPhone 17 momentum right now, but a reality check is coming in 2026. At least, that's according to Counterpoint Research, which just revised its smartphone shipment forecast downward and sees tough times ahead for the entire industry.
The 2026 Smartphone Slump
Here's the situation: Apple could finish 2025 as the world's top smartphone seller by market share for the first time in over a decade. That's the good news. The bad news? That crown might feel a bit heavy heading into 2026, when Counterpoint expects global smartphone shipments to drop 2.1% year-over-year.
That's a meaningful downward revision—2.6 percentage points lower than what the research firm predicted back in November. What changed? Memory costs are going haywire, and smartphone makers are staring down the barrel of passing those costs to consumers who are already dealing with rising average phone prices.
The low-end segment is getting hammered hardest, particularly phones priced below $200. Chinese manufacturers are expected to take the biggest hit from these revisions. But Apple isn't skating by unscathed—the company is forecast to see one of the steepest year-over-year declines among major players.
"What we are seeing now is the low end of the market (below $200 being impacted most severely, with BoM (bill of materials) costs increasing by 20%-30% since the beginning of the year," said Counterpoint Research Director MS Hwang.
Breaking Down the 2026 Market Share Projections
Counterpoint's current estimates for 2026 paint an interesting picture of the competitive landscape:
- Apple: 19% market share, down 2.2% year-over-year
- Samsung: 19% market share, down 2.1% year-over-year
- Xiaomi: 14% market share, down 1.8% year-over-year
- Vivo: 9% market share, down 1.2% year-over-year
- Oppo: 8% market share, down 1.2% year-over-year
- Honor: 6% market share, down 3.4% year-over-year
- Others: 26% market share, down 2.5% year-over-year
Notice something? Everyone's declining, but Apple and Samsung are tied at the top with 19% each. The real carnage shows up in brands like Honor, which could see a 3.4% drop.
The report forecasts average smartphone sale prices rising 6.9% year-over-year in 2026 as companies try to offset ballooning costs. Memory prices alone could jump 40% through the second quarter of 2026, according to Counterpoint's estimates.
"In the lower price bands, steep price increases on smartphones are not sustainable," said Counterpoint Research Senior Analyst Yang Wang.
Why Apple Might Weather This Storm
Here's where things get interesting for Apple investors. Yes, the company faces a sales decline. But compared to the rest of the smartphone universe, Apple appears relatively insulated from the worst of what's coming.
"Apple and Samsung are best positioned to weather the next few quarters. But it will be tough for others that don't have as much wiggle room to manage market share versus profit margins," Wang noted.
That makes sense when you think about it. Apple operates in the premium segment where customers are less price-sensitive. The company has pricing power that budget phone makers simply don't possess. When costs rise across the board, Apple can adjust without losing customers to the extent that a $150 smartphone maker would.
The iPhone 17 Success Story
Context matters here. Apple just posted some impressive numbers in its fourth fiscal quarter, driven largely by iPhone 17 demand. The device has been a major catalyst for the stock in 2025, helping the company set multiple records.
CEO Tim Cook made it clear that momentum isn't slowing down anytime soon. "We are incredibly excited about the strength we're seeing across our products and services, and we expect the December quarter's revenue to be the best ever for the company and the best ever for iPhone," Cook said on the earnings call.
He added that the iPhone 17 "has had a tremendous response from our users around the world."
Chief Financial Officer Kevin Parekh got more specific about expectations. "From today, we expect our December quarter total company revenue to grow by 10% to 12% year-over-year, which would be our best quarter ever," Parekh said. He also predicted the first fiscal quarter would be "our best iPhone quarter ever," with iPhone revenue growing "double digits" year over year.
Apple's fourth-quarter results marked the 11th consecutive quarter of beating analyst estimates on both revenue and earnings per share. That's a solid track record.
What This Means Going Forward
The Counterpoint forecast will likely loom large when Apple reports first-quarter results. Analysts and investors will scrutinize guidance carefully, looking for signals about whether smartphone growth can continue throughout calendar 2026 or if Apple's management sees the slowdown coming too.
The question isn't whether 2026 will be challenging for the smartphone industry—it will be. The question is whether Apple's premium positioning, brand loyalty, and operational flexibility give it enough of an edge to outperform in a down market. Based on Counterpoint's analysis, the answer appears to be yes, even if "outperform" means declining less than everyone else.