Goldman Slashes 2026 Phone Forecast by 6% on Surging Memory Costs
In a January 25 report, Goldman Sachs analysts led by Allen Chang warned that rising memory component prices are derailing the smartphone market's anticipated recovery. The bank has lowered its global smartphone shipment forecast for 2026 by 6% to 1.19 billion units. This revised figure transforms an expected growth year into a 6% year-over-year contraction, directly attributing the downturn to higher Bill of Materials (BOM) costs that disproportionately affect budget-friendly devices.
Low-End Segment to Shrink While Premium Phones Thrive
The impact of component inflation is creating a sharp divide in the market. For low-end smartphones priced under $200, memory chips constitute a significant portion of the total cost. Goldman calculates that as manufacturers pass these costs on, demand in price-sensitive emerging markets will evaporate. The bank projects that sales of entry-level phones will shrink at a compound annual growth rate (CAGR) of -4% between 2025 and 2027, causing their market share to fall from 44% in 2024 to 40% by 2027.
Conversely, the premium segment, with devices priced above $600, remains largely unaffected. For these models, memory costs are a smaller fraction of the final price, and their target consumers are less price-sensitive. Goldman forecasts that high-end phone sales will maintain a 2% CAGR through 2027, eventually contributing 70% of the industry's total revenue. Foldable phones are a particular bright spot, with penetration expected to reach 3.8% (45 million units) in 2026.
PC Market Faces 5% Decline as AI Servers Boom
The cost pressures seen in smartphones are also spilling over into the personal computer market. Goldman now anticipates a 5% decline in global PC shipments in 2026, with a modest 3% rebound not expected until 2027. This suggests a broad-based suppression of consumer electronics demand. In stark contrast, the hardware market for artificial intelligence remains a powerful growth engine. The report projects AI training server sales will increase by 56% in 2025 and a further 67% in 2026, highlighting a major divergence in hardware spending priorities.
