The iPhone may be heading into a tougher year.
New forecasts from market intelligence firm Counterpoint Research suggest that iPhone sales will fall in 2026, and at the same time, Apple will be dealing with significantly higher manufacturing costs. Not exactly a great combo.
According to Counterpoint’s updated global smartphone shipment outlook, overall smartphone sales are expected to decline by 2.1% next year. Apple is predicted to be hit harder than most, with iPhone shipments falling 2.2% year over year. That’s a steeper drop than Samsung, Xiaomi, Vivo, or Oppo.
So what’s driving this?
Rising component costs are the big culprit. Counterpoint says smartphones are becoming much more expensive to build, largely due to higher prices for key parts like memory. Bill of materials costs for low end phones under $200 have jumped 20% to 30% since the start of the year. Even mid range and high end devices are seeing 10% to 15% cost increases.
That pressure doesn’t just hit budget brands. It affects everyone.
The difference is who can absorb it.
Counterpoint notes that Apple and Samsung are better positioned than most to handle these rising costs, thanks to scale, margins, and pricing power. Smaller brands focused on cheap phones may not be so lucky. Some low cost models could become economically unviable altogether.
For Apple, this sets up an interesting year. Fewer iPhones sold, higher costs per device, and the ongoing challenge of convincing buyers to upgrade in a cooling market. How Apple responds, especially with the iPhone 17 lineup, could shape its smartphone business for years to come.
One thing is clear. Making phones is getting more expensive. And selling them is getting harder.
