Omdia Sees 22% Fewer Sub-$400 Phones by 2027 as AI RAM Shortage Lifts Costs
Updated
Updated · CNET · Jul 9
Omdia Sees 22% Fewer Sub-$400 Phones by 2027 as AI RAM Shortage Lifts Costs
3 articles · Updated · CNET · Jul 9
Summary
Omdia said phones priced below $400 could be 22% scarcer through 2027, a squeeze that would hit budget buyers hardest and help drive a 12% drop in the overall smartphone market this year.
Memory costs are the main trigger: RAM and storage expenses for sub-$400 phones nearly doubled between the third quarter of 2025 and first quarter of 2026 as AI infrastructure soaked up global supply.
Chinese brands including Oppo, Vivo, Honor, Xiaomi and Transsion are expected to raise prices or retreat from low-end models because cheaper screens, sensors and radio modules cannot offset the memory surge.
Phones above $400 are still expected to grow 5.7% this year, as vendors shift toward higher-margin devices and wealthier buyers keep purchasing premium models.
IDC expects the RAM crunch to ease by late 2027 or early 2028, when AI build-out slows and memory output rises, but until then consumers may hold onto existing phones longer.