[비즈한국] The global smartphone market is facing a dual crisis of geopolitical risks and parts supply shortages. Amid soaring logistics costs due to the escalating conflict in the Middle East and a simultaneous shortage of memory semiconductors, forecasts suggest that global smartphone shipments will see their sharpest decline on record this year.
OEMs heavily reliant on air freight face 'emergency'
According to the 'Smartphone Market Outlook Tracker' released by market research firm Counterpoint Research on the 3rd, the escalating conflict between the U.S., Israel, and Iran poses a serious threat to the margins and supply chain continuity of the smartphone industry. The current Middle East crisis is characterized more by a 'cost shock'—where logistics, energy, and parts costs rise simultaneously—rather than a sharp drop in smartphone demand. As the industry restructures to increase supply chain resilience, adjustments to pricing strategies, inventory management, and portfolios appear inevitable.
The report estimates that global smartphone shipments in 2026 will decline by 12.4% year-on-year, marking the largest annual drop on record. The outlook suggests that volume will fall slightly below 1.1 billion units, hitting its lowest level since 2013. This reverses the growth trend of the early single digits seen in 2025 in just one year.
Geopolitical variables have hit logistics networks directly. Due to the nature of smartphones being high-priced and short-lived products, they are more dependent on air freight than sea freight. For smartphone OEMs (Original Equipment Manufacturers), the instability of Middle Eastern air cargo corridors is described as fatal.
Many major routes to the Middle East, Africa, Europe, and the U.S. East Coast pass through Middle Eastern air cargo corridors. Currently, Dubai International Airport and Hamad International Airport in Qatar serve as key hubs for cargo bound for Europe, Africa, and the U.S. East Coast. While routes can be diverted to Central or East Asia to avoid the conflict, this adds to operational coordination and cost burdens. The report noted, "This is an inevitable cost of transitioning from an efficiency-centric supply chain to one focused on resilience."
Diverted routes add tens of thousands of dollars per flight
Instability in the energy market is another factor increasing supply chain pressure. International oil prices continue to rise in the aftermath of Iran's announcement of the closure of the Strait of Hormuz, tanker and drone attacks in the Gulf region, and reports of the suspension of operations at the Saudi Aramco Ras Tanura refinery. According to the U.S. Energy Information Administration (EIA), this strait is a vital artery through which about 20% of the world's oil supply passes. As of the 2nd, oil prices surged by about 6%. Rising fuel costs lead directly to increases in air freight rates and insurance premiums.
The burden of transportation costs is confirmed by the numbers. A long-haul freighter like the Boeing 777F consumes 7 to 8 tons of fuel per hour of cruising. If a flight time is extended by 3 hours due to a diverted route, an additional $25,000 (approximately 36.6 million KRW) in fuel costs alone is incurred. When adding ground handling fees, route-specific insurance premiums, and crew labor costs, the cumulative logistics cost per device reaches a level that cannot be ignored.
The refurbished smartphone market, which mainly uses sea freight unlike new products, is no exception. Components are heavily reliant on sea transport, and if access to Middle Eastern transshipment hubs is restricted, operational setbacks are inevitable. It is a structure where bottlenecks across the supply chain pressure both new and used markets simultaneously.
A bigger problem is the memory supply crunch. Counterpoint views that a severe supply-driven memory shortage will continue until 2027. The reduction in the supply of general-purpose memory such as LPDDR4 and the rise in component costs are severely limiting the margin flexibility of OEMs.
Market polarization is also expected to become more pronounced. While the premium product segment has relatively strong defensive capabilities, small and medium-sized manufacturers with a high proportion of emerging markets and low-to-mid-range models are expected to be hit harder. The report predicts that small manufacturers are highly likely to undergo restructuring, unable to withstand pressures such as rising Bill of Materials (BOM) costs, market contraction, and a lack of capacity to pass on prices to consumers.
Counterpoint forecasted, "A full-scale recovery will be difficult before the end of 2027, when new memory supply comes online," and added, "Market fundamentals and replacement cycles will remain structurally changed until we enter the 2030s."