Omdia: Malaysians bought 23% fewer smartphones but paid 38% more for them in 2026
It’s been a rough time for the tech and electronics industry, no thanks in part to AI bros gobbling up components for data centres. It’s impact has cascaded to many different parts of the scene, with the smartphone segment in particular taking a big hit in Malaysia, with less devices sold overall.
According to Omdia’s senior analyst Sheng Win Chow, they’ve found that the Malaysian smartphone market has shrank by 22.7% with total shipments for the first half of 2026 coming in at 3.92 million units, compared to the 5.07 million moved in the first half of 2025. The second quarter of this year was particularly bad, with 26.2% fewer shipments compared to the second quarter of last year.
However, perhaps the more worrying detail in Omdia’s research is that on average Malaysians are also paying more for their smartphones. in the first half of 2025, smartphones were selling for an average price of USD464, or roughly RM1,893. That’s a huge jump compared to the same period of last year, when the average selling price of a smartphone in Malaysia was USD337, or roughly RM1,375.
Omdia highlighted that the biggest drop was in the sub-USD100, or roughly sub-RM408 mark. The entry level segment saw a huge drop of 90% year-on-year, going from 492,000 units moved in the second quarter of last year to just 49,000 in the second quarter of this year. Similarly, the USD100-USD199 range saw a drop of 35%.
That being said, there are two separate things pushing the average smartphone price up. To be clear, buyers aren’t paying 38% more for the same exact device, but rather that there’s a repricing of the segments itself. Omnia uses Samsung as an example, who’s entry level models have gone from USD128 to USD283 in a single generation; that’s a 30-40% increase in retail price.
While they didn’t name a specific model, we found ourselves that the Samsung Galaxy A27 5G for example starts at RM1,399, while the Galaxy A26 5G started at RM1,199. Similarly, the Galaxy A36 5G and Galaxy A56 5G started at RM1,499 and RM1,999 respectively, but the latest Galaxy A37 5G and Galaxy A57 5G now start at RM1,899 and RM2,399 instead.
The second big reason why Malaysians are buying pricer devices though is that, there’s simply not a lot of budget-friendly smartphones left in the market. With both factors coming into play at the same time, it all contributed to both the drop in overall shipments and the rise in average selling price.
Unsurprisingly, Omdia cites memory cost as a key factor in all of this.
“DRAM and NAND prices have climbed steeply as manufacturers shifted capacity toward AI datacentre demand. On a phone selling below $400, memory and storage now account for more than 60% of build cost.
Some brands are paying four to five times what they paid a year ago. At the bottom of the range there is no margin to absorb that. A brand can raise the price or stop making the phone. Both remove it from the shelf,” – Sheng Win Chow, Omdia senior analyst
Omdia found that there was really only one winner in the smartphone scene this year: Apple. The Cupertino brand was the only brand to actually increase its shipments in Malaysia this year, with 28% more units moved. This means that almost one in ten phones sold in Malaysia are iPhones, up from one in sixteen from a year ago.
The other winner is arguably Honor, which only saw a 3.3% dip. Omdia claims it held its unit base by not repricing its latest generations of devices, which perhaps explains why it also saw a 1.3% dip in average selling price year-on-year.
Transsion, whose brands include Infinix and Tecno, as well as Xiaomi were the ones who repriced their devices the most, seeing a 71.2% and 48.4% increase in average selling price year-on-year respectively. They did however also see a drop in shipments of 38.4% and 30.4% respectively.
Realme is perhaps the manufacturer hit the hardest by this year’s tech crunch. Despite an average selling price increase of only 10.6%, their shipments in Malaysia this year so far have dropped 41.9% compared to the same time frame last year.
Unfortunately, Omdia predicts that things won’t be getting better anytime soon. The research firm expects that costs will continue to get worse in the second half of this year, and we’ll have to wait and see to know if buyers are willing to pay more or continue to wait before pulling the trigger on a new smartphone.
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