The smartphone industry could experience a record-breaking decline in 2026 as a result of RAM shortages arising from memory-hungry AI giants. This is according to the latest report from the International Data Corporation (IDC), which estimates that smartphone shipments will decline by 12.9 percent this year, which is the “lowest annual shipment volume in more than a decade.”
Additionally, the average selling price of a smartphone is set to reach a new high, with IDC predicting a 14 percent increase to a record $523. “Although memory prices are projected to stabilize through mid-2027, they are unlikely to return to previous levels,” says Nabila Popal, senior researcher at IDC. He said the sub-$100 phone segment would become “permanently unprofitable.” Next week, Apple is rumored to announce a new version of its budget smartphone dubbed the “iPhone 17e,” which could hint at where things are headed.
Francisco Geronimo, IDC’s vice president of Worldwide Client Devices, says in the report that the memory shortage is expected to affect budget-friendly Android smartphones the most, as the rising cost of components leaves them “no choice but to pass the cost on to end users”. According to Pople, this could result in smaller brands exiting the industry, while allowing Apple and Samsung to gain more market share.
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