Smartphone Shipments Face Historic Decline Due to Memory Shortage
The booming demand for artificial intelligence-driven systems has created a severe shortage of RAM, impacting various tech sectors significantly. A new analysis suggests that this situation might lead to a staggering 12.9% drop in smartphone shipments this year—an alarming trend that hasn’t been seen in over a decade. Following these findings, another analyst echoed similar sentiments, forecasting a decline of 12%.
Earlier estimates indicated that manufacturers shipped about 1.26 billion devices in 2025, but this number is expected to fall to approximately 1.12 billion in the current year.
This memory scarcity is indicative of a more extensive market shift. It signals a fundamental reorganization of the market landscape, affecting overall demand, vendor relationships, and product offerings.
Moreover, consumers can expect a 14% rise in the average retail price of smartphones due to these memory constraints. As smaller players exit the market and low-end vendors struggle with declining shipments, the effects of this downturn will be profound. Despite a considerable drop in shipments, the average selling price is projected to reach a record $523 this year.
The repercussions of increased component pricing could lead to the elimination of economically viable sub-$100 smartphones, pushing many manufacturers out of that segment.
Research indicates that regions like the Middle East and Africa might see over a 20% plummet in shipments year-over-year. Similarly, declines of 10.5% in China and 13.1% in the broader Asia-Pacific region are also anticipated.
Stabilization is expected as RAM prices are projected to level off by mid-2027. While high-end smartphones might endure better, the sub-$200 segment could still witness a significant 20% dip.
This trend could persist well into the second half of 2027, as the expansion of memory supply is likely to take several quarters. Manufacturers are already responding with delayed launches and rethinking their product lineups, leading to price hikes of 10-20% for some offerings early in 2026.
There may also be a potential growth spike in the second-hand devices market due to price fluctuations for new handsets.
Predictions indicate that consumers will likely see increased prices across the smartphone market in 2026 due to rising memory costs. Brands may need to either dramatically raise prices or compromise on specs, signaling an end to the previous model of greater specifications for lower prices.
This is likely to result in a contraction of 20% or more in entry-level and mid-tier segments, impacting many brands that have historically thrived in these categories.
Key Takeaways
- The global shortage of RAM is creating significant supply chain challenges for smartphone manufacturers.
- Predictions indicate a historic decline in shipments, underscoring a changing market landscape.
- Average smartphone prices are expected to rise, leading to economic pressures on consumers.
- The entry-level smartphone market may face severe restrictions, affecting affordability options for buyers.
- As manufacturers adjust their strategies, including potential price hikes and product delays, buyers may experience fewer choices in the upcoming years.
- The second-hand smartphone market may gain traction as consumers seek more affordable options amid rising new device prices.