A lack of memory could cause the biggest drop in smartphone shipments in a decade

Increased demand for computers and data centers to start operations AI is causing a huge decrease in RAMdriving memory prices very high. Now, analysts at IDC predict that this will cause smartphone shipments to drop by 12.9% this year, making it the lowest single-year drop in more than a decade. Hours after IDC released its report, another research firm, Counterpoint, he predicted the same and said the market will drop by 12% this year.

Earlier this year, IDC reported that manufacturers have shipped 1.26 billion devices in 2025. The company predicts that number will drop to 1.12 billion this year.

“The memory crisis will cause a short-term decline; it is indicative of an overall market restructuring, and a restructuring of long-term TAM (market stability), product positioning, and product mix,” said Nabila Popal, senior research director of IDC’s Worldwide Quarterly Mobile Phone Tracker, in a statement.

Popal said that due to the decrease in memory, the price of the smartphone is expected to increase by 14%.

“We expect to strengthen as the smaller players exit, and low-end vendors face a significant decrease in shipments amid additional challenges and low demand at premium prices. Although shipments will see record lows, smartphone ASP (sale price) is expected to rise 14% to a record $523 this year,” he added.

Popal also noted that rising product costs could make a $100 smartphone “totally unprofitable,” discounting phone manufacturers that make devices at that price.

The company said that, as a result, shipments to the Middle East and Africa will drop by more than 20% annually. China and the wider Asia Pacific region (excluding Japan) will also see declines of 10.5% and 13.1%, respectively.

IDC added that it expects RAM prices to stabilize by mid-2027.

Counterpoint said that high-end smartphones will be able to withstand the change, but the sub-$200 smartphone segment will see a 20% drop.

“This trend is expected to continue until H2 2027, as it will take several stages for the memory to expand.” Low-end phones should be more affected, especially since LPDDR4 is slower than expected. OEMs are already responding with launch delays, updated portfolios, and detailed trade-offs. 2026,” Senior Expert Yang Wang said.

The company also predicted that price fluctuations among mobile phones will also drive the second-hand market.

Earlier this year, Nothing co-founder and CEO Carl Pei also warned that cell phones will become more expensive in 2026 as cell phone memory costs rise. “Companies are now faced with a simple choice: raise prices by 30% or more in some cases, or cut back.” “The ‘minimum income’ environment on which many luxury brands were built will not be sustainable in 2026,” he said.

“As a result, some markets, especially the entry and middle segments, may shrink by 20% or more, and the brands that have been dominating these segments will suffer,” Pei added.