European mobile operators sold fewer handsets in the second quarter of 2026. Yet they captured a bigger slice of a shrinking market. The reason lies not in surging demand through carrier stores but in a steeper collapse elsewhere.

Total smartphone sales across Europe fell 8 percent year over year. Sales through operators dropped a more modest 4 percent. Purchases in the open market, from independent retailers or direct from manufacturers, plunged 11 percent. Operators’ share rose to 36 percent from 35 percent a year earlier. The figures come from Counterpoint Research.

Contract purchases held firmer. Shoppers buying on plans proved less sensitive to price jumps. Outright buyers in the open market felt every euro of increase. And those increases have been significant.

A memory price crisis explains much of the pain. Surging demand from AI data centers has diverted production capacity. DRAM and NAND flash costs climbed sharply. Low-end and mid-range phones, which rely heavily on affordable memory, became far more expensive to build. Manufacturers passed on the pain or cut configurations. Budget models suffered most. The open market, where those devices dominate, contracted faster.

“Smartphone sales through operators in Europe are typically more high-end than through the open market, as more are purchased on a contract,” said Jan Stryjak, associate director at Counterpoint Research. “They are also more skewed towards more premium brands like Apple, Samsung, and Google. The collapse of the low-end of the smartphone market so far in 2026 because of the memory price crisis has therefore benefitted the operator channel, which has declined comparatively less than the open market.”

The quote appears in reporting by 9to5Mac and The Register. Stryjak expects the operator channel to keep gaining share for the next several quarters. The lower end remains under pressure. Independent retailers have stepped up promotions. That effort may cushion some price rises and give the open market a modest lift. But the structural shift favors carriers for now.

Within the operator channel, a notable leadership change occurred. Apple overtook Samsung. Apple’s share of carrier smartphone sales climbed to 37 percent from 33 percent a year earlier. Samsung slipped to 34 percent from 39 percent. The swing handed Cupertino the top spot in carrier channels across the continent.

Those percentages reflect share within a smaller pie. Overall operator volumes still declined. Apple’s absolute sales through carriers may or may not have grown. The data does not specify unit volumes for individual brands. Still, the relative gain signals strength at the premium end where iPhones compete. Recent reports from EMSNow show Europe’s overall smartphone shipments hit a three-year low for a second quarter, falling 10 percent to 35 million units. Western Europe held up better thanks to premium performance. Eastern Europe, more exposed to budget Chinese brands, dropped harder.

Smaller names posted impressive growth rates in the carrier segment. Chinese brand vivo recorded a 90 percent year-over-year increase in sales through operators. Motorola followed with 27 percent growth. Both benefited from strategic placements with key European carriers. A year earlier, Google and HONOR had led growth in the same channel. Brand momentum shifts quickly when operators adjust their device lineups.

The memory squeeze traces back to deliberate choices by chipmakers. Samsung Electronics, SK Hynix, and Micron Technology control more than 90 percent of the global memory market. They redirected wafer production toward high-bandwidth memory and server-grade DRAM for AI accelerators. Consumer electronics received leftovers. Prices for conventional DRAM rose 10-15 percent quarter over quarter in late 2026 forecasts from TrendForce, cited in coverage by Evertiq. NAND flash climbed faster. IDC analysts warned of persistent shortages into 2027. Global smartphone shipments could drop 2.9 to 5.2 percent in downside scenarios, with sharper hits at lower price points.

Entry-level devices have all but vanished in some markets. Chinese makers, responsible for roughly 60 percent of global volume, slashed budget projects. Average selling prices climbed. In Europe the effect concentrated on the open market. Carriers, pushing premium flagships bundled with service contracts, insulated themselves somewhat. But even they sold fewer phones overall.

Broader economic caution compounded the pressure. Uncertain financial outlooks left consumers hesitant on discretionary upgrades. Promotions dried up as manufacturers protected margins. Inventory levels ran low. Further declines loom in coming quarters, especially for budget-focused players.

Apple emerged as a relative winner. Its premium mix aligned perfectly with carrier strengths. The company’s share gains in the operator channel outpaced the market contraction. Samsung, long dominant in Europe, lost ground in the very segment where its mid-range A-series once thrived. Rising costs for those models appear to have pushed buyers toward outright flagships or delayed purchases.

Analysts see no quick resolution. AI infrastructure demand shows little sign of easing. Memory bit demand could surge more than 80 percent in 2026 for data centers. Most new supply is already committed. Consumer device makers compete for scraps. The result? Higher prices, thinner specs, or fewer choices at the low end. The $100 smartphone, once a growth engine in emerging markets and budget segments, faces extinction in parts of Europe.

Operators, for their part, gain influence. More customers tie phone purchases to service contracts. That linkage strengthens retention and revenue predictability even as device margins fluctuate. Yet the overall pie shrinks. Fewer total connections and slower replacement cycles threaten long-term service growth if phone upgrades stall.

Retailers outside the carrier channel fight back with aggressive deals. Whether those promotions overcome sticker shock remains uncertain. Early signs suggest they mitigate but do not reverse the trend. The memory crisis, driven by structural shifts in chip production rather than cyclical demand, could last years.

Europe’s handset market in 2026 thus reveals a tale of two channels. One clings to premium resilience. The other absorbs the full force of component inflation and consumer caution. Apple’s rise in carrier share marks a symbolic turn. Samsung’s slip highlights vulnerability when mid-tier pricing erodes. Vivo and Motorola demonstrate that targeted operator partnerships still deliver growth for nimble brands.

How long this divergence lasts depends on memory supply. Chipmakers must eventually balance AI needs with consumer electronics. Until then, budget buyers pay more or wait. Carriers quietly enlarge their footprint. And the data keeps flowing to data centers that started it all.