Apple Faces Extreme Drop in Global Smartphone Sales

By Douglas A. McIntyre Published Jul 17, 9:17AM EDT

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Global smartphone shipments fell 11% in Q2 2026, the lowest since 2013, costing Apple its global market share crown to Samsung.
AI-driven memory and storage shortages raised iPhone production costs while Samsung's AI-powered Galaxy S26 surged to capture 24% of global shipments.
With iPhone generating $85 billion of Apple's $144 billion in quarterly revenue, its Gemini-powered Siri launch carries enormous stakes.
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Apple Faces Extreme Drop in Global Smartphone Sales — © IPhone 5 Unboxing, 10-10-12 (CC BY 2.0) by Brett Jordan

In the second quarter of this year, smartphone sales dropped more than at any time in the last thirteen years. Prominent research from Counterpoint uses the term “shipments.” In a new report, its researchers wrote, “Global smartphone shipments tumbled 11% YoY in Q2 2026, reaching the lowest second-quarter levels since 2013.” Apple (NASDAQ: AAPL | AAPL Price Prediction) also lost the market share crown to arch-rival Samsung. This happens just as Apple is about to launch its new AI product.

For investors, the extent to which earnings are based on the iPhone makes this very bad news. A shortage of memory storage hurt the supply of crucial technology. Additionally, DRAM and NAND prices have risen sharply due to AI demand. AI is supposed to save Apple. At the same time, it has increased the cost of building the iPhone. In fact, some of these shortages led Apple to raise the prices of Macs and iPads recently. At the time, Apple management said, “The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage.”

Samsung surged to the lead in global market share. Its shipments were 24% of all global shipments in the second quarter. This was up from 20% in the same quarter a year ago. Apple’s share rose from 17% to 29% over the same period.

Its new Galaxy S26 series largely drove Samsung’s success. It is a high-end product given its price, making it an iPhone competitor. Counterpoint said that its AI functions help drive sales.

Apple is at one of the most important inflection points in its recent history. After falling behind in AI features late last year, it is about to release versions of Siri and Apple Intelligence powered by Google’s Gemini. Many industry observers think Apple got away with a low price for this. It will pay $1 billion a year. Of course, Google gets massive distribution in a market with brutal competition from products like OpenAI’s and Microsoft’s (NASDAQ: MSFT) Co-Pilot.

How much is at stake for the iPhone as it tries to claim a position in AI-powered products? Almost everything. In the most recent quarter, Apple had revenue of $143.8 billion, of which $85.3 billion was from the iPhone.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.