According to Omdia, smartphone prices are expected to remain elevated even after the shortage concludes.

      Begin with the numbers, as they are the type that resolves disputes. In the initial quarter of 2026, manufacturers shipped 298 million displays for the refurbished phone market, compared to 289 million for manufacturers of new phones. This number for refurbished phones represents a 20% increase year over year, according to Omdia. The two figures have crossed, with the second-hand market continuing to expand.

      What this number reflects

      Refurbishment, in this context, encompasses more than just a shop selling a used device. Omdia includes displays used for consumer repairs, professional refurbishment of recycled phones, and aftermarket replacement parts. Thus, the statistics account for both cracked screens and resold units. It represents the entire ecosystem of maintaining existing phones instead of opting for new ones.

      The technology breakdown provides insight. OLED comprised 7% of shipments in the refurbished market during this quarter, a rise from 2% a year prior, indicating that the majority still relies on LCDs. This suggests that premium devices from three or four years ago are now entering their second phase of use.

      Panel makers did not instigate this. They sought alternatives.

      The underlying issue traces back to memory prices. Elevated memory costs led to increased component expenses, prompting manufacturers to reduce production plans, resulting in fewer orders for panel factories than anticipated. Omdia forecasts a 12% decline in display demand from new phones throughout 2026. Meanwhile, capacity isn’t idly waiting during this adjustment.

      Joy Guo, a senior principal analyst in Omdia’s display division, described the situation in terms of storage rather than growth. She noted that the refurbishment market serves as a "reservoir" that absorbs fluctuations in demand from smartphone producers. A reservoir is not a targeted market; it is where excess ends up.

      The source of this overflow in the phone market

      The new-phone segment illustrates the entire situation. Global smartphone shipments fell by 6% in the second quarter to 272 million units, down from 288.9 million the previous year. The decline wasn’t uniform. Xiaomi experienced a 26% drop to 31.2 million, marking its second consecutive quarterly decrease, with over half of its shipments priced below $200—the segment unable to absorb rising component costs. OPPO, which includes OnePlus and realme, saw a 17% decrease to 28.4 million, while also reducing entry-level options to safeguard margins. Vivo’s shipments dropped by 18%.

      Not all declines stem from components. Shipment reductions to the Middle East decreased by 18% due to geopolitical impacts on supply chains and retail, which Omdia anticipates will stabilize in the latter half of the year.

      The desk continues to monitor every aspect. Rising memory costs resulted in a fifth quarterly decline in Chinese shipments, similarly affecting the PC sector.

      Two companies grew for contrasting reasons

      Samsung shipped 60.5 million units, up by 5%, capturing 22% of the market. By manufacturing its own memory, Omdia credits its vertical integration for allowing it to better manage shortage impacts compared to competitors. Additionally, it gained share in the entry-level segment, as Chinese rivals trimmed their offerings and raised prices; holding the scarce component proves more valuable than selling the least expensive phone.

      Apple recorded its strongest second quarter ever, shipping 55.1 million units—up 23%—for a 20% market share during its typically weakest quarter. However, this growth is not without conditions: channel partners stockpiled base iPhone 17 supplies in anticipation of forthcoming price increases and a more expensive iPhone 18, meaning some of the growth reflects inventory rather than consumer demand. Apple has already increased iPhone 17 prices in Japan.

      The enduring aspect

      Here lies an argument worth considering, which reflects Omdia’s insights. Prices have not only increased; consumer expectations have risen alongside them. Shoppers have grown accustomed to higher phone prices over the past year, providing manufacturers the opportunity to set their prices from this elevated level when memory costs eventually decline. Omdia describes this as a “structural repricing of the smartphone market, where profitability increasingly takes precedence over volume expansion.”

      “Price is once again a competitive differentiator,” stated Le Xuan Chiew, a research manager at Omdia. Amber Liu, a practice leader at the firm, foresees no swift recovery, indicating that shipments will continue to decrease despite flagship launches, holiday sales, and shopping events. The nuance is significant: this prediction addresses future pricing tendencies rather than established facts, relying on the assumption that consumers remain adjusted rather than simply reducing purchases.

      Similar pressure is already affecting wearables

      Omdia released another set of figures recently, and one essential detail emerges. Rising memory and storage prices are driving average selling prices up across wearable devices. Notable instances include Samsung raising prices on its Galaxy Watch series and specific advanced sports watch lines, according to Omdia.

      It’s important to