The global smartphone market is set to take a hit in 2026, but Apple (AAPL) stands to benefit from the pain, according to a Morgan Stanley AlphaWise smartphone survey.
Global smartphone shipments will decline 13% year over year in 2026 and recover slightly to a 3% year-over-year improvement in 2027. That works out to 1.1 billion and 1.14 billion units, respectively.
Morgan Stanley (MS) previously expected shipments of 1.3 billion in 2026 and 1.31 billion in 2027.
The survey, which polled 2,000 participants over 18 in the US and China and about 1,500 in the UK and Germany, indicates that while upgrade rates are expected to improve in both the US and China next year, Apple is the only one of the major smartphone brands that is projected to see a positive, and improving, year-over-year net switching rate.
“Among prospective US smartphone upgraders, advanced features and upgrade eligibility are the two reasons where Apple leads peers,” Morgan Stanley analyst Erik Woodring wrote in an investor note.
“Among prospective China smartphone brand switchers, better overall device quality is the #1 reason why smartphone owners in China are switching to the iPhone,” he added.
Respondents were especially interested in Apple’s long-rumored foldable iPhone, which Bloomberg’s Mark Gurman says the company will launch later this fall, with 27% of current iPhone owners saying they had a strong interest in the phone.
Apple is late to the foldable smartphone game. Both Samsung and Google (GOOG, GOOGL) have released a number of foldable devices, as have the company’s China-based rivals.
And while foldables haven’t taken the world by storm, shipments have improved in recent years, with preorders for Samsung’s latest Galaxy Z Fold 7 easily eclipsing those of the company’s previous folding devices, according to CNET.
The move is typical of Apple, which generally waits for a product segment and its technology to mature enough for the company to enter the space and obtain its own foothold, eventually grabbing a chunk of the associated market share. Apple did the same thing with the iPhone, iPad, and Apple Watch, and it appears set to do the same thing with its upcoming foldable option.
But Apple, like the rest of the electronics industry, is also facing a major memory chip crisis, which is expected to force some companies to cut lower-cost devices from their lineups out of concern for margins.
Apple, however, has the pricing power to absorb increased memory prices without having to raise the cost of its devices, something Android smartphone makers may struggle with.