Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Apple Inc., Samsung Electronics Co. Ltd. and other major smartphone makers face a tougher demand environment as rising component costs push handset prices higher in the U.S. and China, according to new research from Counterpoint Research.
Counterpoint analysts said Thursday that smartphone demand weakened across both major markets, with cost inflation emerging as a key pressure point. Rising memory costs are forcing manufacturers to increase prices while consumers remain sensitive to higher costs. U.S. smartphone sales fell 5% year over year in the second quarter as higher memory prices and broader macroeconomic pressures hurt consumer demand, Counterpoint analyst Blake Przesmicki said.
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The rest of the market plunged 45% as smaller manufacturers struggled with higher component costs. Counterpoint said larger companies have used their scale to secure components at prices smaller rivals cannot justify. The pressure was particularly severe at the low end.
Sales of smartphones priced below $100 tumbled 64% as manufacturers either stopped shipping some devices or raised prices to offset higher memory costs. Prepaid smartphone sales fell 11%, although Samsung and Motorola gained share as weaker competitors pulled back. Motorola raised prices on several Moto G models during the quarter, while Samsung increased the Galaxy A17 price by $50 in July.
Counterpoint expects smartphone average selling prices to rise again in the third quarter. Apple is expected to increase prices for its iPhone 18 lineup, while Google is launching its Pixel 11 devices at higher prices than the Pixel 10 series carried at launch. Trending: Avoid the #1 Investing Mistake: How Your 'Safe' Holdings Could Be Costing You Big Time Still, Counterpoint expects Apple to benefit from a strong upgrade cycle as users move from the iPhone 15 series.
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