Smartphone Shipments Set for Record 12.9% Drop as AI Memory Crunch Lifts Prices to $523
Updated
Updated · gadgetreview.com · May 27
Smartphone Shipments Set for Record 12.9% Drop as AI Memory Crunch Lifts Prices to $523
7 articles · Updated · gadgetreview.com · May 27
IDC said 2026 smartphone shipments will fall 12.9% in the steepest annual decline on record, framing the slump as a structural market reset rather than a normal demand downturn.
AI servers are absorbing scarce DRAM and NAND capacity because memory makers earn far higher margins there, leaving fewer chips for phones, where memory accounts for 15% to 20% of mid-range manufacturing costs.
$523 is now IDC’s forecast average selling price for 2026, while sub-$100 smartphones—about 171 million devices a year—face effective extinction as vendors drop uneconomical low-end models.
Apple and Samsung are better placed to secure supply, while low-end Android brands and buyers in Africa and Southeast Asia face 40% to 50% retail price increases, more refurbished purchases and longer replacement cycles.
Late 2027 is the earliest point IDC sees for recovery, with only modest rebounds in 2028, signaling that ultra-cheap smartphones are unlikely to return.
With Android shipments plummeting 20%, can Samsung and foldables salvage the market against a dominant Apple?
As the mid-range phone market collapses, are consumers being forced to choose between budget models and expensive flagships?
The 'era of ultra-cheap smartphones is over,' so why are companies now piloting $40 phones in Africa?