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Global Smartphone Market Faces Record Annual Decline as Chip Crunch Worsens

The iPhone 17 series on display at the Apple Store in New York City, US, September 19, 2025. (Reuters)
The iPhone 17 series on display at the Apple Store in New York City, US, September 19, 2025. (Reuters)
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Global Smartphone Market Faces Record Annual Decline as Chip Crunch Worsens

The iPhone 17 series on display at the Apple Store in New York City, US, September 19, 2025. (Reuters)
The iPhone 17 series on display at the Apple Store in New York City, US, September 19, 2025. (Reuters)

The global smartphone market is heading for its steepest annual contraction on record, with shipments projected to slump by 13.9% this year to 1.08 billion units, Counterpoint Research said on Monday, citing a worsening shortage of memory chips.

The forecast is a downgrade from the 12.4% decline projected in February, with the squeeze in global chip supply exacerbated by the Iran war.

IMPACT MOST ACUTE AT BUDGET END OF MARKET

The impact is being felt most acutely in lower-end smartphones as ‌chipmakers shift ‌production capacity to AI-related chips, making entry-level devices less ‌economical ⁠to produce.

Global smartphone wholesale ⁠prices rose 14% in the first quarter while shipments fell 3.1% year on year. That trend is expected to continue as inventory built before the supply shock becomes depleted, with some models priced below $150 likely to disappear from the market.

"Smartphone makers in the low and mid-tier are caught between cost increases they cannot absorb and consumers with limited spending power," said Wang ⁠Yang, a principal analyst at Counterpoint, an independent research ‌company that publishes quarterly smartphone shipment data.

"The ‌question is no longer how to grow shipments or market share, but whether ‌to remain in the market at all."

The memory chip shortage ‌is the most severe supply-side disruption the smartphone industry has faced, Wang said, adding that manufacturers are unable to offset the impact through pricing or product changes.

PREMIUM END OF THE MARKET MORE RESILIENT

The premium segment has proven more resilient. Apple posted ‌record revenue for the first three months of the year, helped by customers upgrading to its iPhone ⁠17 series. ⁠Apple's 2026 shipments are expected to remain flat before rising 5% next year, Counterpoint projections show.

With more stable chip supply and stronger margins than many rivals, Apple is well placed to gain market share and could face less pressure to raise prices.

Samsung Electronics kept volumes steady in the first quarter and is expected by Counterpoint to register only a 4% decline in shipments over the full year, outperforming the wider market thanks to stable supply and a consistent product line-up.

Transsion, which is heavily exposed to the market for smartphones priced below $150, is forecast to suffer a 32% drop in shipments this year. Rivals Xiaomi and Honor, meanwhile, are projected to post full-year declines of 28% and 20% respectively, Counterpoint said.

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Technology

Meta’s Teen Safety Deal Runs into an Unsolved Problem: Proving Age

A Meta logo is seen at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 14, 2023. (Reuters)
A Meta logo is seen at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 14, 2023. (Reuters)
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Meta’s Teen Safety Deal Runs into an Unsolved Problem: Proving Age

A Meta logo is seen at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 14, 2023. (Reuters)
A Meta logo is seen at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 14, 2023. (Reuters)

Meta's landmark settlement with nearly every US state promises curfews and time limits for teens on Instagram and Facebook -- but rests on age and parent checks nobody has figured out how to make work.

The deal, which ended a federal trial in Oakland, California, on Wednesday, gives Meta one year to identify which of its users are 13 to 17 years old.

Those accounts will have curfews and time limits switched on by default, and only parents will be allowed to loosen them.

How that gets enforced is unclear -- and any system Meta builds risks angering privacy advocates, who warn it hands platforms and governments yet another way to identify users, infringing on civil liberty.

For the new regime to work, Meta must determine the age of every user in the participating states and territories, adults included.

Methods could include identification documents, mandatory selfies, or analysis of user activity. Any account not verified within 14 days will face the same constraints as a teenager's.

These approaches have already faltered elsewhere.

Eight months after social networks were banned for under-16s in Australia, teen usage has climbed back almost to previous levels, thanks to virtual private networks, or VPNs, that conceal a user's real identity and location.

As for parents, the agreement offers no way to establish that a supervising adult is who they claim to be.

What would stop an older sibling from passing themselves off as a guardian, Judge Yvonne Gonzalez Rogers asked Wednesday as she weighed Meta's plans.

"There is some fluidity, very intentionally," said Nicklas Akers, a California prosecutor, who added that there was no plan to require a birth certificate or identification from the parent.

- Margin of error -

With no reliable way of verifying ages and parents, curfews and time limits remain theoretical.

"Teens are notorious for finding workarounds to these types of rules, and parents can also override some of the most stringent ones," said social media industry expert Jasmine Enberg.

"Looking ahead, that could take some of the responsibility away from Meta and put it on parents, with the goal of helping insulate the company from similar cases in the future," she added.

In France, where a ban on under-15s was just struck down by the Constitutional Council, many children get around the rules with their parents' help, according to the communications regulator Arcom.

If Meta cannot verify a user with identification, such as a driver's license or passport, it will estimate age by analyzing that user's activity -- collecting still more data in the process.

"This enshrines Meta's harmful surveillance into law, and it will compromise users' privacy and anonymity while increasing their exposure to data breaches and government data requests," the digital rights group Electronic Frontier Foundation said in a statement.

The settlement does include safeguards, limiting data collection to what age estimation requires and letting adults wrongly classified as minors appeal.

It is "the most significant intervention in children's online safety we have seen," said Iain Corby, head of the AVPA, an industry association for age-verification providers.

Identification documents carry their own risks. In October, a breach at a third-party age-verification company potentially exposed the government IDs of 70,000 Discord users.

- Improvising -

With no reliable or trusted methods available, everyone is improvising.

OpenAI applies a restricted version of ChatGPT to minors by guessing a person's age from their usage patterns, an approach Meta's settlement allows.

In the European Union, where the tracking of minors is tightly constrained, it has delayed the rollout for months.

France has sketched out a different path, in which a trusted third party verifies ages using the "double-blind system" already in place for adult sites.

The verifier does not know which site is asking, and the site gets only a binary answer: allowed or not.

Nothing like that exists in the United States, where Meta will run the checks itself -- and keep the data.

Technology

Google Changes Spam Policy in EU to Avert Antitrust Fine

The Google logo is seen outside the company's offices in London, Britain, June 24, 2025. (Reuters)
The Google logo is seen outside the company's offices in London, Britain, June 24, 2025. (Reuters)
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Google Changes Spam Policy in EU to Avert Antitrust Fine

The Google logo is seen outside the company's offices in London, Britain, June 24, 2025. (Reuters)
The Google logo is seen outside the company's offices in London, Britain, June 24, 2025. (Reuters)

Alphabet's Google ‌on Friday said it had changed its spam policy in Europe to address EU concerns that could have resulted in an antitrust fine.

The US tech giant found itself in EU regulators' crosshairs after publishers complained about its site reputation abuse policy.

It targets the practice of publishing ‌third-party pages on a ‌site in an ‌attempt ⁠to abuse search rankings ⁠by taking advantage of the host site's ranking signals, commonly referred to as parasite SEO.

The EU said that its monitoring showed that Google's spam policy demoted news media ⁠and other publishers' websites and content ‌in Google ‌search results, when those websites include content ‌from commercial partners.

Google said that ‌from August 30 any manual actions taken to demote sites would not apply to users in the 27 EU ‌nations, Iceland, Norway and Liechtenstein (the European Economic Area).

The policy would not ⁠change ⁠outside the European Economic Area, it added.

Concerns about the policy had prompted the European Commission, which acts as the EU competition enforcer, to open an investigation under the Digital Markets Act, which aims to rein in the power of Big Tech.

DMA breaches can cost companies fines of up to 10% of their global annual turnover.

Technology

Meta Settlement Opens New Front in Global Fight Over Social Media Harm

The logo of Meta at the Meta Lab in Los Angeles, California, US, May 20, 2026. (Reuters)
The logo of Meta at the Meta Lab in Los Angeles, California, US, May 20, 2026. (Reuters)
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Meta Settlement Opens New Front in Global Fight Over Social Media Harm

The logo of Meta at the Meta Lab in Los Angeles, California, US, May 20, 2026. (Reuters)
The logo of Meta at the Meta Lab in Los Angeles, California, US, May 20, 2026. (Reuters)

Meta's move to restrict teenagers' use of social media in the US shows companies have tools to better protect young people online, Australian officials said on Thursday, while in the Philippines, an official said the US company had pledged to boost protection there too.

Meta's up to $18 billion settlement with nearly all US states over social media harm to teenagers has opened a new front in a global government fight to protect children and curb addiction to platforms such as Facebook and Instagram.

Governments around the world are trying to curb children's access to harmful online content, including a world-first ban in Australia late last year on social media for children under 16.

Australian Communications Minister Anika Wells said in an email to Reuters that social media companies "have the tools at their disposal to protect ‌young people from ‌their addictive features but have chosen not to use them".

Meta agreed to pay up to $18 ‌billion ⁠over a decade ⁠and limit how teenagers use Facebook and Instagram under an agreement with nearly all US states to resolve claims that it designed those platforms to addict children. Meta denied wrongdoing in agreeing to settle.

The deal brings sweeping changes to Meta's Facebook and Instagram platforms in the United States, including imposing a default two-hour limit on its apps for users under the age of 18.

In South Korea, the media regulator said some of Meta's measures should be applied to young users worldwide, rather than just in specific markets. Mexican president Claudia Sheinbaum said the government needed to review its potential impact for Mexico.

There were some early signs that the settlement could help other countries win similar measures.

Philippines Department of Information ⁠and Communications Technology Secretary Henry Aguda told Reuters that both Meta and gaming platform Roblox had ‌pledged in a meeting on Thursday to tighten age verification processes in the ‌country, as well as expand parental controls and implement time limits on the social media.

The European Commission said it was waiting for Meta ‌to present changes to limit the addictive designs of its social networks.

The Commission already issued preliminary findings earlier this year that Meta ‌breached the Digital Services Act (DSA). In July, it said Facebook and Instagram should disable autoplay and endless scrolling by default, introduce screen-time breaks and change recommendation systems to reduce incentives to keep users engaged — measures that go beyond the US settlement.

In April, the Commission said Meta had failed to stop children under 13 from opening or maintaining accounts. The US settlement could make it harder for Meta to argue that tougher age-verification measures are impractical.

"We ‌have been very clear ... we expect proper screen time management, we expect proper parental control on these platforms. Meta knows ... the ball is in Meta's court," said spokesperson Thomas Regnier.

EXECUTION ISSUES

Enforcement ⁠of restrictions in Australia has, ⁠however, been patchy so far.

Early evidence suggests the law has been undermined by weak age-verification systems, with multiple studies, including from Australia's internet regulator, showing 80% of minors were still on social media months after the ban took effect in December. That prompted lawmakers to double the maximum fine and increase regulatory powers.

In Asia, countries including China, South Korea, India, Malaysia, Indonesia and the Philippines are also seeking tighter oversight of social media as well as curbs, including to block alleged scams, and in particular to protect children.

Australian class-action law firm Shine Lawyers said it was in discussions with Mark Lanier, a lawyer who worked on the California action against Meta, about a potential similar action.

"For years, families have been asking whether enough has been done to protect children from platform features designed to maximize engagement," said Shine Lawyers head of class actions Craig Allsopp.

"We are now examining whether similar legal issues arise in Australia, including whether Australian children and families may have claims connected to the design, operation and promotion of social media platforms. If Australian families have been affected, they deserve answers."