Smartphone makers could be in for another rough year.
Global smartphone shipments are expected to fall by 2.1% in 2026 as rising memory chip prices push production costs higher, according to Counterpoint Research. The biggest headache? DRAM, a key component in every smartphone, is getting more expensive—and it’s hitting budget phones the hardest.
Counterpoint says the cost of building low-end smartphones has already jumped by 20% to 30% since early 2025, largely because of higher DRAM prices. And it’s not over yet. Costs could climb another 10% to 15%, leaving brands with two unpopular choices: raise prices or strip out features. For price-sensitive buyers, neither option is very appealing.
The memory crunch is happening because chipmakers are focusing on higher-end memory for artificial intelligence. AI servers need far more memory than smartphones, and they’re simply more profitable.
That’s leaving fewer “legacy” memory chips available for phones, especially the ones used in cheaper models.
Not all brands will feel the pain equally. Apple and Samsung are expected to weather the storm better than most.
Even though their shipments are also forecast to dip slightly in 2026, both companies are still projected to hold around 19% of the global market each. Their premium phones give them more room to absorb higher costs without hurting profits too much.
Smaller players and brands that rely heavily on entry-level phones—like Honor and Oppo—may have a tougher time. With thinner margins, rising component costs could squeeze profits and even cost them market share.
Adding to the pressure is the explosive growth of AI servers.
Companies like Nvidia are reportedly using smartphone-style memory chips in AI systems, a move that could double server memory prices by late 2026. That only tightens supply further and keeps prices high.
Bottom line: phones may get pricier, especially at the low end, and the battle for memory chips is only getting more intense as AI demand continues to surge.
About The Author
2 Comments