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The market for smartphone chips shrank by a fifth in the third quarter. Apple almost maintained its unit sales and is now only one percentage point behind Qualcomm. However, this drop says more about the weakness of the other manufacturers than about Apple's strength.
Global shipments of smartphone chips fell by 21 percent in the third quarter of 2026 compared to the previous year, according to a preliminary analysis by Counterpoint Research. The figures include chips, not smartphones sold. Nevertheless, this trend aligns with the same market research firm's device figures, which show a 20 percent decline and an iPhone share of 22 percent for the same period.
Key Facts at a Glance
- Shipments of smartphone chips fell by 21 percent in the third quarter of 2026.
- Apple has a 21 percent share, down from 17 percent last year, and is thus one point behind Qualcomm.
- In purely mathematical terms, Apple shipped around 2 percent fewer chips, Qualcomm around 30 percent fewer, and MediaTek around 35 percent fewer.
- Counterpoint now expects 20 percent fewer chips for 2026, compared to 14 percent in July.
From an eight-point gap to one
MediaTek remains the market leader with 28 percent, but has lost 6 percentage points. Qualcomm falls from 25 to 22 percent, while Apple rises from 17 to 21 percent and remains in third place. A year ago, there was an 8-point difference between Qualcomm and Apple.
Counterpoint only provides the overall decline and market share, not unit sales per vendor. However, the performance of individual vendors can be roughly calculated from these two figures:
| Provider | Share Q3 2025 | Share Q3 2026 | Quantity, calculated |
|---|---|---|---|
| MediaTek | 34 % | 28 % | approximately -35% |
| Qualcomm | 25 % | 22 % | approximately -30% |
| Apple | 17 % | 21 % | approximately -2% |
| UNISOC | 14 % | 13 % | approximately -27% |
| Samsung | 6 % | 8 % | approximately +5% |
| Others | 4 % | 8 % | – |
The right-hand column is only useful as an indication of magnitude because the percentages are rounded. For Apple and Samsung, the result is so close to zero that the rounding alone can reverse the sign.
Why Apple and Samsung fare better
Counterpoint attributes the decline to rising storage costs, longer replacement cycles, and cautious inventory management by manufacturers. The mid-range and entry-level segments were hit hardest, as manufacturers discontinued entry-level models to protect their margins. The premium segment also declined, but less significantly.
According to Counterpoint, Apple and Samsung benefit from integrated supply chains and their focus on higher-priced devices. MediaTek and UNISOC, on the other hand, are more heavily reliant on the mid-range and entry-level segments. Qualcomm suffered additional losses because Samsung uses its own Exynos 2600 alongside the Snapdragon 8 Elite Gen 5 in its Galaxy S26 series, and Chinese manufacturers experienced weaker sales. At the same time, Qualcomm's modem business with Apple is shrinking.
A comparison of device sales figures reveals the stark differences between the two companies. Apple holds a 22 percent share of the smartphone market and a 21 percent share of the chip market, as each iPhone uses its own dedicated chip. Samsung leads in device sales with 23 percent, but accounts for only 8 percent of the chip market.
UNISOC, on the other hand, is experiencing a turnaround: In the first half of the year, Counterpoint still counted the provider among the winners because many entry-level models switched to its 4G platforms.
The forecast is significantly worse
At the end of July, Counterpoint projected a 14 percent decrease in chip production for 2026. Now it's 20 percent, with a further 3 to 4 percent expected in 2027. Analyst Soumen Mandal doesn't anticipate any easing of costs.
Memory prices are expected to continue rising, but fluctuations next year are likely to be less pronounced than in 2026. Flagship chips are expected to remain largely stable in 2027 despite higher prices due to the switch to 2nm manufacturing, while rising memory and component costs will further increase cost pressures.
In the third quarter, memory prices rose by 5 to 10 percent compared to the previous quarter, and Counterpoint expects a further 5 percent increase for the fourth quarter. The premium segment is expected to be supported by the new 2nm chips: Apple's A20 Pro from the iPhone 18 Pro and iPhone Duo, MediaTek's Dimensity 9600 Pro, and Qualcomm's Snapdragon 8 Elite Gen 6. Even with these chips, Counterpoint anticipates that unit sales will remain below those of the fourth quarter of 2025.
Apple's gain in shareholding is not a free pass
I consider Apple's jump less spectacular than it initially appears. Mathematically, roughly 2 percent fewer chips account for the four-point gain; the rest is due to the slump at MediaTek and Qualcomm. Device sales figures from October also show a decline for Apple, which Counterpoint attributes primarily to the lack of a base model. The regular iPhone 18 is reportedly expected to follow in spring 2027.
The storage crisis is also affecting Apple. For the December quarter, the company expects a gross margin of 45 to 46 percent, down from 48.2 percent in the previous year, citing primarily higher storage costs as the reason. I therefore expect the price pressure to continue into 2027, but it will be most severe for budget models: according to Counterpoint, manufacturers are already reducing their offerings in this segment.
Would you keep your current smartphone longer because of this development, or would you rather buy a new one before storage becomes even more expensive? Let us know in the comments how long you expect your device to last.
