Reminiscence scarcity might trigger the most important dip in smartphone shipments in over a decade

An increase within the want for computer systems and knowledge facilities to energy AI is causing a massive shortage of RAM, driving reminiscence costs sharply higher. Now, analyst agency IDC predicts that it will trigger smartphone shipments to plummet by 12.9% this 12 months, making it the most important single-year dip in additional than a decade. Hours after IDC revealed its report, one other analyst agency, Counterpoint, made a similar prediction and mentioned the market will dip by 12% this 12 months.

Earlier this 12 months, IDC reported that producers shipped 1.26 billion devices in 2025. The agency predicts that determine will drop to simply 1.12 billion this 12 months.

“The reminiscence disaster will trigger greater than a short lived decline; it marks a structural reset of your complete market, basically reshaping the lengthy‑time period TAM [total addressable market], the seller panorama, and the product combine,” mentioned Nabila Popal, senior analysis director with IDC’s Worldwide Quarterly Cellular Telephone Tracker, in a press release.

Popal mentioned that due to reminiscence scarcity, the typical retail worth of a smartphone is predicted to rise by 14%.

“We count on consolidation as smaller gamers exit, and low-end distributors face sharp cargo declines amid provide constraints and decrease demand at larger worth factors. Though shipments will witness a report drop, smartphone ASP [average selling price] is projected to rise 14% to a report $523 this 12 months,” she added.

Popal additionally famous that rising element prices might make the sub-$100 smartphone “completely uneconomical,” pricing out telephone makers that manufacture units at that worth level.

The agency mentioned that, due to this pattern, shipments within the Center East and Africa will drop greater than 20% year-over-year. China and the broader Asia Pacific area (excluding Japan) may even see declines of 10.5% and 13.1%, respectively.

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

Counterpoint mentioned that premium smartphones can be extra resilient to this modification, however the sub-$200 smartphone section will see a 20% dip.

“The impression is predicted to proceed by H2 2027, as it’ll take a number of quarters for reminiscence provide growth to materialize. Decrease-end smartphones are more likely to be affected probably the most, particularly as LPDDR4 provide is shrinking sooner than anticipated. OEMs are already responding with launch delays, streamlined portfolios, and specification trade-offs. We have now additionally noticed 10% to twenty% worth will increase throughout some Android OEM portfolios in January 2026,” Principal Analyst Yang Wang mentioned.

The agency additionally predicted that pricing volatility amid handsets may even drive the second-hand units market up.

Earlier this 12 months, Nothing co-founder and CEO Carl Pei additionally warned that smartphones will value extra in 2026 as reminiscence prices for smartphones rise. “Manufacturers now face a easy alternative: elevate costs by 30% or extra in some circumstances, or downgrade specs. The ‘extra specs for much less cash’ mannequin that many worth manufacturers have been constructed on is not sustainable in 2026,” he mentioned.

“In consequence, some markets, notably entry and mid-tier segments, are more likely to shrink by 20% or extra, and types which have traditionally dominated these segments will wrestle,” Pei added.