China smartphone shipments fell 17% YoY in June, with high memory costs weighing on demand

Overview

This report tracks China's smartphone and 5G phone shipments, new model launches, and changes in camera specifications in June. The core conclusion is that demand weakened materially in June, with smartphone shipments declining both YoY and MoM; overall 2Q26 shipments remained above Goldman Sachs' previous expectations; on the cost side, rising memory prices became an important factor weighing on demand. Meanwhile, smartphone camera configurations are shifting from “more cameras” to “higher pixel counts”: although the number of cameras per device has declined from historical highs, the penetration of high-pixel cameras continues to rise.

Core views

Goldman Sachs takes a cautious view of China's smartphone demand: June shipments were 17m units, down 17% YoY and 36% MoM, and full-year 2026 shipments are expected to decline 10% YoY. 5G phones remain dominant, with June shipments of 16m units and penetration of 85%, although they also declined both YoY and MoM. In terms of specifications, the number of cameras per device fell from a peak of 3.8 in 2022 to 2.9 year to date in 2026, while the share of 20MPx+ cameras rose from 52% in 2024 to 57% in 2025 and 66% year to date in 2026, supporting Goldman Sachs' view that smartphone camera specifications in China are upgrading.

Analysis framework

The report primarily combines monthly industry data tracking with a breakdown of model specifications. On the one hand, it cites MIIT data to track shipments of smartphones and 5G phones in China, as well as new model launches and penetration; on the other hand, it reviews models and camera specifications launched year to date in 2026 by brands including Huawei, Honor, Xiaomi, OPPO, Vivo, and Transsion, comparing the number of cameras per device, the share of low-pixel cameras, and the share of 20MPx+ high-pixel cameras.

Methodology notes

• Monthly industry trackingMIIT mobile phone shipment and new model launch data

  Use official monthly shipment volumes and new model counts to measure changes in demand for smartphones and 5G phones in China.

  The report cites MIIT data to compare June with May and YoY with MoM changes, and calculates 5G penetration to assess demand strength and product-cycle changes.

• Product specification analysisSmartphone camera specification breakdown

  Assess the direction of hardware specification upgrades through the number and pixel structure of cameras in new models from major brands.

  The report reviews 187 models and 551 cameras launched by Huawei, Honor, Xiaomi, OPPO, Vivo, and Transsion year to date in 2026, focusing on the shares of 2/5/8MPx low-pixel cameras and 20MPx+ high-pixel cameras.

• Investment research disclosure frameworkGS Factor Profile

  Goldman Sachs provides relative investment context for stocks across Growth, Financial Returns, Multiple, and Integrated dimensions.

  The disclosure section states that the GS Factor Profile is based on standardized rankings of forward sales, EBITDA, EPS, ROE, ROCE, valuation multiples, and other indicators, used for comparison with the market and industry peers.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Hon Hai

  A Buy-rated mobile phone supply chain stock and included on the Conviction List

  Strengths

  Benefits from Goldman Sachs' positive view on selected mobile phone supply chain assets.

  Weaknesses

  Declining end-market smartphone demand may pressure order momentum.

  Comparison

  Listed alongside AAC, Lingyi, Largan, SZS, Fositek, and TMC as Buy-rated names.

  Risks

  China smartphone shipments below expectations, slower customer ordering, and pass-through of cost pressures.

• AAC

  A Buy-rated mobile phone component supply chain stock

  Strengths

  Related to smartphone specification upgrades and component value content.

  Weaknesses

  Industry shipment pressures may offset the contribution from specification upgrades.

  Comparison

  Part of the mobile phone supply chain Buy basket listed by Goldman Sachs.

  Risks

  Smartphone demand below expectations, component price competition, and customer concentration.

• Largan

  A Buy-rated optical and camera-related supply chain stock

  Strengths

  Rising penetration of 20MPx+ high-pixel cameras supports the optical upgrade trend.

  Weaknesses

  A decline in the number of cameras per device may limit overall volume growth.

  Comparison

  More directly exposed to the camera specification upgrade theme than assembly and general component names.

  Risks

  Slower pace of high-pixel upgrades, changes in brand model mix, and declining end-market shipments.

• TMC

  A Buy-rated stock listed by Goldman Sachs

  Strengths

  May benefit from demand related to the electronics supply chain and specification upgrades.

  Weaknesses

  The report does not elaborate on its specific business contribution in the main text.

  Comparison

  Listed as Buy-rated alongside Hon Hai, AAC, Lingyi, Largan, SZS, and Fositek.

  Risks

  Industry demand declines, rising costs, and valuation or cyclical volatility.

• China smartphone industry

  The report's core tracking subject

  Strengths

  5G penetration remains at 85%, while the share of high-pixel cameras continues to rise.

  Weaknesses

  June shipments declined 17% YoY and 36% MoM, while full-year 2026 shipments are expected to decline 10% YoY.

  Comparison

  2Q26 shipments were 69m units, above Goldman Sachs' previous estimate of 59m units, but momentum weakened significantly in June.

  Risks

  Further increases in memory costs, weak consumer replacement demand, and brand inventory adjustments.

Key data

• June China smartphone shipments17m units, -17% YoY, -36% MoMMIIT data; May YoY growth was +19%.
• 2Q26 China smartphone shipments69m units, flat QoQ/YoYAbove Goldman Sachs' previous estimate of 59m units.
• 2026 China smartphone shipment forecast-10% YoYThe main pressure comes from the drag of rising memory costs on demand.
• June China 5G phone shipments16m units, -38% MoM, -12% YoY5G penetration was 85%.
• June China 5G new model launches13 models, +63% YoYMay had 11 models, down 15% YoY.
• June China smartphone new model launches19 models, +90% YoYMay had 15 models, down 44% YoY.
• Major-brand new model sample year to date in 2026187 models, 551 camerasCovers Huawei, Honor, Xiaomi, OPPO, Vivo, and Transsion.
• Average number of cameras2.9 cameras per model in 2026 YTD2025/2024/2023/2022 were 3.1/3.3/3.5/3.8, respectively.
• Share of 20MPx+ cameras66% in 2026 YTD57% in 2025, 52% in 2024, and 39% in 2023.
• Share of 2/5/8MPx cameras24% in 2026 YTD2025/2024/2023/2022 were 31%/36%/45%/51%, respectively.

Impact & implications

Weakening demand and rising memory costs are putting pressure on China's smartphone shipments, potentially affecting end-brand sales, channel inventories, and the pace of component ordering. Structurally, camera upgrades remain one of the hardware innovation directions: although the number of cameras per device is declining, the share of high-pixel cameras is rising, benefiting supply chain companies with capabilities in high-specification cameras, optics, and related components. The Buy-rated stocks listed in the report are concentrated in supply chain segments including smartphone assembly, acoustics, precision components, optics, and semiconductor foundry services.

Risks

• Rising memory costs further suppress end-market demand.
• China smartphone shipments fall below Goldman Sachs' expectations.
• Momentum in 5G phone shipments and new model launches slows.
• A decline in the number of cameras per device may weaken total camera demand.
• The pace of high-pixel camera upgrades falls below expectations.
• Inventory adjustments by end brands affect supply chain orders.

What to watch

• Subsequent MIIT monthly smartphone and 5G phone shipment data.
• Whether full-year 2026 China smartphone shipments approach Goldman Sachs' forecast of a 10% YoY decline.
• Memory price trends and their impact on device costs and demand.
• Whether penetration of 20MPx+ cameras continues to rise.
• The pace and specification changes of new model launches by Huawei, Honor, Xiaomi, OPPO, Vivo, Transsion, and other brands.
• Changes in orders, gross margins, and customer demand for the supply chain stocks listed as Buy-rated by Goldman Sachs.