Counterpoint Research has revealed that the escalation of the US-Israel-Iran conflict represents primarily a logistics and cost risk for the mobile phone industry, rather than a structural demand collapse.

It noted that margin exposure and supply chain continuity are the key areas of impact.
The study authored by its Research Analyst, Ahmad Shehab, noted that as OEMs rely heavily on air freight, smartphone markets across the Middle East, Africa, Europe and the U.S. are among the most exposed. He said many of the freight routes transit through or depend on Middle East air cargo corridors.

He said replacing Dubai and Doha as central hubs is operationally feasible but marked a shift from efficiency to resilience, placing greater pressure on operational coordination and costs.

Recalling that the current conflict is not new, he said the latest escalation appeared more complex and potentially longer in duration, supported by a larger military presence in the region and a more strategic and serious target of changing the ruling regime in Iran. If the conflict extends, it could weigh more heavily on regional stability and global trade, it noted.

According to him, for the smartphone industry, logistics remained a key risk factor. He said the majority of global smartphone shipments are transported by air.

He explained that despite higher costs compared to sea freight, air transport is preferred due to the high value and short “shelf life” of smartphones. Faster shipping, he said, prevents inventory shortages and value depreciation, especially for new model launches. The study said a prolonged Middle East crisis could therefore impact freight routes, operating costs and inventory planning across global smartphone markets.

“OEMs utilise interconnected flight paths to supply key markets with smartphones across the Middle East, Europe, Africa and the Americas. Within this network, the Middle East plays a central role. Dubai International Airport in the UAE and Hamad International Airport in Qatar serve as major technical stops and cargo transshipment hubs. These airports enable cargo consolidation and redistribution before shipments continue to Europe, Africa or the U.S. East Coast.

“Amid the ongoing Middle East crisis, rerouting options are available but come with costly trade-offs. Shipments to Europe may shift toward Central Asian hubs such as Tashkent, while westbound cargo to the U.S. East Coast may route via East Asia and North America. For African and some regional markets, alternatives such as Addis Ababa and Egypt may be used. However, these adjustments are basically a shift from efficiency to resilience,” Shehab stated.

According to him, the conflict’s impact also extends to the refurbished market. While new smartphones are shipped by air, spare parts used in refurbishment spaces are largely shipped by sea.

“Therefore, disruptions limiting access to Jebel Ali Port in Dubai, a key regional trans shipment hub for spare parts, are creating more pronounced operational constraints for the refurbishment supply chain.

“All these events are exacerbating the situation of an already strained smartphone supply chain, where elevated memory costs are weighing heavily on OEMs and constraining margin flexibility. If disruptions persist, overall logistics expenses continue to rise, including insurance adjustments and extended ground handling time. While these increases may appear insignificant when spread across an aircraft carrying hundreds of thousands of smartphones, the added cost is layered onto an already thin per-unit logistics allocation.”