Europe’s mobile operators sell fewer phones but gain share as budget market shrivels
Europe's mobile operators have increased their share of smartphone sales to 36 per cent, marking a 1 percentage point gain year-on-year. This growth is driven not by higher sales volumes—operator handset sales fell 4 per cent—but by steeper declines in independent retail channels, which dropped 11 per cent. The shift reflects the ongoing impact of the AI-driven memory crisis, which has made budget devices commercially unviable to produce.
Operators' channel remains dominated by higher-end models, with Apple recently overtaking Samsung as the market leader, whilst Motorola and vivo show the fastest growth. Counterpoint Research expects this trend to continue for several quarters as budget phones remain under pressure from elevated component costs. Meanwhile, independent retailers are increasing promotional activity to compete, and some consumers may increasingly turn to the second-hand market, forecast to grow 12 per cent this year.
- Mobile operators gain share as independent phone retailers shrink faster
- Memory crisis makes budget smartphones economically unviable, hitting open market hardest
- Apple overtakes Samsung in operator channel; second-hand market predicted to boom
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Europe's mobile phone market is undergoing a significant shift in how phones reach consumers. Mobile operators—the companies that provide phone services—are now selling proportionally more phones, even though the overall market is shrinking. This is primarily because independent phone retailers are declining much faster than operators are.
The underlying cause is a shortage of affordable components, particularly memory chips, which has made budget smartphones uneconomical to manufacture. As a result, the budget segment that once formed a substantial part of the market has largely disappeared. Operators have adapted by focusing on premium and mid-range models, with Apple becoming the most popular brand in their channels.
This market restructuring matters because it affects how Europeans access new phones and what options they have available. With independent retailers shrinking and affordable budget models increasingly scarce, consumers face fewer places to buy phones and fewer price points to choose from. The growth in the second-hand market reflects how these changes are pushing some buyers towards cheaper alternatives.
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The case for
The consolidation toward operator channels represents rational market adaptation to supply constraints and component cost realities. Operators offer customers integrated financing, technical support, warranty services, and curated device selections that smaller independent retailers cannot match. This concentration of distribution among stronger, better-resourced players ensures business resilience and sustained customer support during a challenging period, whilst the focus on premium devices reflects appropriate quality standards and longevity.
The case against
This market shift dangerously concentrates retail power and reduces consumer choice precisely when affordability matters most. Operators' resulting dominance suppresses price competition and makes new smartphones unaffordable for cost-sensitive consumers, forcing many toward the second-hand market as an inadequate substitute. The contraction of budget phone production and independent retail channels widens digital inequality and creates dependency on concentrated corporate players, whilst underlying supply chain vulnerabilities demand strategic solutions rather than accepting reduced accessibility.