European mobile operators secured 36 percent of smartphone sales in the second quarter, up from 35 percent a year earlier, as open market retail sales contracted sharply due to rising component costs and tighter household budgets. Total European smartphone shipments fell 10 percent year over year to 35 million units in the second quarter of 2026, marking the weakest second-quarter shipment level in three years, according to Counterpoint Research figures reported by The Register.
Component Shortages Impact Budget Devices
Sales of new smartphones through European operators declined by 4 percent during the second quarter compared with the same period a year ago. Device sales through the open market fared much worse, declining by 11 percent as consumers bypassed independent retailers and direct manufacturers.
The divergence stems from an ongoing, AI-driven memory crisis that has restricted supplies of the DRAM and NAND flash components required for consumer electronics. Chipmakers have increasingly prioritized memory components for AI servers, where profit margins are higher, leaving consumer electronics brands competing for tighter supplies.
The resulting rise in component prices has made it commercially unviable for manufacturers to produce budget-friendly devices. Independent retailers face steep declines in open-market sales as entry-level and mid-range Android categories bear the brunt of the supply constraints.
Apple and Samsung Lead European Market Share
Apple gained nine percentage points compared with the same period in 2025, narrowing a historical gap with its South Korean rival. Strong interest in the iPhone 17 series and Apple’s premium market position protected the company from deeper declines.
Samsung maintained its 34 percent market share through steady demand for its Galaxy S26 devices and improved product availability. Meanwhile, Chinese manufacturers lost ground across the region, with Xiaomi falling to 15 percent, OPPO dropping to 4 percent, and Honor reaching 3 percent.
In the operator channel specifically, Apple overtook Samsung to claim the greatest market share in Europe. Motorola and vivo emerged as the fastest-growing brands within the carrier segment.
Operator Contracts Shield Premium Buyers
Contract purchases through mobile operators hold up better than independent retail sales because monthly payment plans make expensive devices more accessible. Devices sold through operators tend to be higher-end models than those bought outright from independent retailers as SIM-free, unlocked units.
Counterpoint associate director Jan Stryjak stated that operators are likely to keep gaining market share for the next few quarters as the lower end of the market continues to absorb the shock of high memory costs. However, Stryjak noted that independent retailers are increasing promotional activity to mitigate price rises and stimulate open-market demand.
Consumers are also turning increasingly to the second-hand market, which is projected to see a 12 percent rise in trade volume this year as new phone prices climb. Counterpoint forecasts that 80 percent of top-flight smartphones will feature agentic AI capabilities by 2027, introducing software agents capable of executing actions on behalf of the user.
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