Apple, Samsung Can Absorb the Smartphone Cost Shock — Smaller Rivals May Not Be so Lucky

Counterpoint Research says rising memory and component costs are pushing smartphone prices higher in both the U.S. and China, weakening demand and pressuring smaller handset makers more than Apple and Samsung. U.S. smartphone sales fell 5% year over year in Q2, while sales across the four largest brands declined only 4% and the rest of the market plunged 45%, highlighting the advantage of scale. In China, smartphone sales fell 8.6% in the first 30 weeks of 2026, with Apple’s demand softening after the 618 festival and Xiaomi lifting prices after launching the REDMI Note 17 series. Apple is expected to raise iPhone 18 prices, but its strong upgrade cycle and carrier subsidies may help offset the cost shock. The overall takeaway is mixed: pricing pressure may support revenue per device for leaders, but it likely worsens volume trends and intensifies share losses for smaller rivals.