If you haven’t yet learned about the computer and consumer electronics shortages, you really should. This situation is fueled by supply chain constraints, notably due to AI technologies and cloud computing, the former of which requires enormous amounts of computing power to support operations. This affects memory, GPUs and storage, mainly SSDs. We’ve heard repeatedly that the consequences of the shortage could extend wider than expected, with the price of many gadgets expected to rise due to the RAM shortage, if they haven’t already. It’s also why Steam Machine is more expensive than most of its supporters wanted, with Valve confirming our worst fears ahead of its pricing announcement. But it turns out that the global crisis is also having a huge impact on the used phone market, and not just new and upcoming devices.
Everything undulates outwards like a stone or a pebble thrown into a pond, this stone being the shortage of material. Due to the surge in memory prices, the nomenclature of smartphones has also increased significantly. This leads to two consequences: more expensive phones and “shrinkflation”, phones with reduced specifications or less powerful hardware despite similar or higher prices than previous generations.
Naturally, people choose not to upgrade, keep their old phones for longer, or opt for used models instead. A research report from Counterpoint shows this happening in numbers. Refurbished smartphone sales grew 4% in early 2026, with the core new smartphone market likely seeing a decline of up to 14.8% through the end of the year. Shortages and prices are pushing people to buy second-hand and refurbished.
AI-powered devices continue to gain market presence
While sales of new smartphones are down overall, a trend that has continued for several weeks throughout 2026, so much so that global shipments are at their lowest level since 2013, something strange is happening on the other side of this equation. GenAI-enabled smartphones are expected to increase their market share, via global shipments, in the second half of 2026 and into 2027. Ultimately, AI-ready devices will account for up to 45% of global phone shipments for the year. In other words, even with everything going on, shortages included, AI phones seem like an obvious focal point for the future.
Counterpoint believes that AI will be the way to encourage people to upgrade. He expects that one in three smartphones sold in 2027 will have agentic AI capabilities. It’s also worth noting that AI features are seeping into older devices that people already own. Samsung’s recent One UI 8.5 update for Galaxy devices introduced a ton of AI-based tools and even added some Galaxy S26 features to older phones. Google also wants Gemini intelligence to take control of your Android phone.
If you’re not a fan of AI features, you won’t be happy to know that eight out of ten premium phones will be infested in the next two years. If you lean towards a more positive view, that’s eight out of ten phones with more powerful capabilities. Regardless, Counterpoint’s research also assumes that AI technologies and functions will also transfer to other smart devices. AI-based wearables are also expected to increase their market share, although the outlook is even wider: we could see an average growth of 21% per year by 2032.
