Smartphone shipments took a significant hit in the quarter ending September this year, plummeting by 22% year-on-year. This marks the steepest quarterly decline ever recorded, with indications that the situation may deteriorate even further. Over the past year, the booming artificial intelligence sector has fueled a surge in demand for memory chips, causing their prices to skyrocket. This has, in turn, squeezed profit margins in the smartphone industry, compelling manufacturers to hike prices, downgrade hardware specifications, and discontinue entry-level models.

Currently, the smartphone industry is undergoing a profound and lasting structural transformation. Market growth is not anticipated to rebound until at least 2028, and there is a possibility that the long-term market size may contract. Companies like Apple, which boast extensive distribution networks and a strong emphasis on premium products, are poised to seize a larger portion of the market.

Memory chip prices have soared by approximately 350% since last year and are still on the rise, placing immense strain on manufacturers' profit margins and shipment volumes. The market has yet to hit rock bottom, suggesting that the most challenging period is still on the horizon.