Global smartphone handset sales continued to decline year-over-year in February, with supply chain preference concentrated in memory and MLCC

Overview

This report tracks global smartphone handset sales performance in February 2026. UBS notes that global smartphone demand continued to weaken at the start of the year, with year-to-date handset sales down 3.9% year-over-year. Demand pressure mainly comes from memory shortages and price increases suppressing device demand, and Chinese OEMs with higher exposure to low-end and mid-end products are more visibly affected. In contrast, iPhone handset sales remain resilient; Samsung's short-term data is affected by the later launch timing of the Galaxy S26, making March and subsequent S26 performance key observation points.

Core views

The core views include: first, UBS cut its 2026 smartphone shipment forecast from -5.0% year-over-year to -10.0% year-over-year, reflecting the negative impact of memory supply and pricing on demand. Second, year-to-date handset sales for Chinese OEMs are generally in negative growth territory, with deeper declines for Transsion, Huawei, and Xiaomi, making market share defense more difficult. Third, Apple is the relatively most resilient among the major OEMs, and UBS expects it may be the only major OEM to achieve year-over-year shipment growth in 2026. Fourth, whether Samsung can deliver on its guidance of flat to slight smartphone shipment growth depends on actual handset performance after the Galaxy S26 launch. Fifth, in supply chain positioning, UBS relatively prefers suppliers in memory, MLCC, semiconductors, and some contract manufacturing segments, while being more cautious on some OEMs, display, optics, and contract manufacturing companies.

Analysis framework

The report uses monthly sell-through handset sales data as its main analytical framework, combining cross-checks across regions, brands, and supply chain segments. UBS compares year-over-year changes globally and across regions such as China, the United States, India, and Europe, while also tracking year-to-date sales performance of major OEMs and mapping demand changes to companies in the smartphone supply chain covering memory, MLCC, semiconductors, packaging and testing, assembly, display, and optical components.

Methodology notes

• Industry demand trackingSell-through year-over-year tracking

  Year-over-year change in handset sales

  By comparing monthly handset sales with the same period last year, this measures the strength of real consumer demand rather than relying only on manufacturer shipments or channel sell-in.

• Supply chain mappingOEM and component exposure analysis

  Transmission of demand pressure through the supply chain

  This links changes in branded OEM sales with supply chain segments such as memory, MLCC, chips, packaging and testing, contract manufacturing, and optics to identify relatively benefiting or pressured companies.

• Relative preferenceMost/Least Preferred list

  Relative positioning view across multiple stocks

  The report forms most-preferred and least-preferred lists based on analyst ratings, target prices, and valuation metrics, rather than providing only a single-company investment conclusion.

Asset mapping & comparison

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

• SK Hynix

  Smartphone memory supplier; UBS APAC Key Call Buy

  Strengths

  Benefiting from tight memory supply-demand conditions and rising prices, and included on the report's most-preferred list.

  Weaknesses

  Weakening smartphone handset demand may limit some shipment upside.

  Comparison

  Preferred relative to Chinese OEMs and parts of the consumer electronics assembly chain.

  Risks

  Memory cycle reversal, weaker macro demand, and inventory cycle volatility.

• Apple / iPhone

  Major smartphone OEM; AAPL rated Neutral

  Strengths

  Year-to-date iPhone handset sales are +12.6% year-over-year, and demand for the iPhone 17 series is stronger than the previous generation.

  Weaknesses

  The report does not include AAPL on the most-preferred list, and the rating is Neutral.

  Comparison

  More resilient than Chinese OEMs and one of the few growth bright spots among major OEMs.

  Risks

  Slowing demand for premium models, weakening product cycle, and macro consumer pressure.

• Samsung Electronics

  Smartphone OEM and supply chain company; Buy

  Strengths

  Galaxy S26 preorder trends show strong launch demand, and UBS believes March may achieve year-over-year growth in handset sales.

  Weaknesses

  Year-to-date handset sales are -9.7% year-over-year, with short-term performance dragged down by the later S26 launch timing.

  Comparison

  Weaker short-term sales resilience than Apple, but the new product cycle may bring recovery.

  Risks

  S26 series handset performance falls short of expectations, preventing delivery of full-year guidance for flat to slight growth.

• Chinese OEMs

  Smartphone brands including Transsion, Huawei, Xiaomi, Oppo, and Vivo

  Strengths

  Some brands have regional market presence and channel foundations.

  Weaknesses

  Year-to-date sales are broadly negative, and difficulties in memory procurement plus price increases are hitting low-end/mid-end demand harder.

  Comparison

  Under more pressure than Apple and some upstream suppliers.

  Risks

  Market share loss, rising costs, macro uncertainty, and weak low-end demand.

• ASE, AVGO, Hon Hai, JCET, MediaTek, Murata, SEMCO, TSMC

  Smartphone semiconductor, packaging and testing, MLCC, foundry, and assembly supply chain

  Strengths

  Most are included on the UBS preferred list and rated Buy, reflecting relative positioning value.

  Weaknesses

  Still affected by the overall phone demand cycle and fluctuations in customer orders.

  Comparison

  Preferred relative to Hua Hong, Lenovo, LG Display, Pegatron, Xiaomi, and Sunny Optical.

  Risks

  Declining end demand, inventory cycles, intensified competition, and product innovation falling short of expectations.

Key data

• 2026 smartphone sell-in forecast revision-10.0% year-over-year, versus -5.0% year-over-year previouslyUBS lowered the forecast because memory shortages and price increases continue to suppress demand.
• Global smartphone year-to-date handset sales-3.9% year-over-yearThe year-over-year decline continued in February.
• Regional year-to-date handset salesChina -5.5%, United States -8.8%, India -9.3%, Europe -5.7%, Other regions +0.2%All major markets except other regions recorded negative growth.
• Chinese OEM year-to-date handset salesTranssion -16.9%, Huawei -12.5%, Xiaomi -10.0%, Oppo -4.4%, Vivo -2.7%Vendors with higher exposure to low-end and mid-end products are under more obvious pressure.
• iPhone year-to-date handset sales+12.6% year-over-yearMainly supported by demand for the iPhone 17 series, which is about +15% year-over-year relative to the iPhone 16 series.
• iPhone ProMax/Pro model mix41%Basically healthy compared with 42% in January-February 2025.
• Samsung year-to-date smartphone handset sales-9.7% year-over-yearMainly affected by the later release of the Galaxy S26 series; UBS expects March may return to year-over-year growth.
• Samsung full-year smartphone shipment forecastUBS forecasts -3% year-over-yearCompany guidance is flat to slight growth, and S26 series performance will determine whether it can deliver.

Impact & implications

The investment implication is that the downturn in smartphone device demand does not affect all assets evenly. Chinese OEMs and some hardware component companies face dual pressure from demand and market share; Apple-related demand is relatively resilient; Samsung has short-term recovery potential driven by new product timing. At the supply chain level, memory, MLCC, advanced semiconductors, and high-quality contract manufacturing segments are seen as relatively more attractive, while display, optics, some OEMs, and companies with high exposure to low-end demand face higher risk.

Risks

• Macroeconomic uncertainty may further suppress consumer electronics demand.
• Memory shortages and price increases may continue to affect device costs and end demand.
• Chinese OEMs may struggle to defend market share, especially in low-end and mid-end product lines.
• If Galaxy S26 series handset sales fall short of expectations, the risk to Samsung delivering its full-year guidance will rise.
• The mobile phone supply chain is highly cyclical, and inventory cycles plus intensified competition may amplify earnings volatility.
• Mistakes in product launch timing, design, channels, or distribution may lead to rapid market share loss.

What to watch

• March Galaxy S26 series handset sales and its performance relative to the S25 series.
• Whether memory procurement difficulty and price trends continue to squeeze low-end/mid-end smartphone demand.
• Whether Chinese OEM sales and market share continue to decline during the year.
• Whether demand for the iPhone 17 series can be maintained, and whether the ProMax/Pro model mix remains healthy.
• Monthly year-over-year changes in smartphone sell-through globally and in major regions.
• Changes in ratings, target prices, and valuations for companies on UBS's most-preferred and least-preferred lists.