Budget smartphones will be hit hardest as memory prices rise

The memory shortage is forecast to push smartphone prices higher in 2026, triggering a market decline and forcing budget phone makers to merge or disappear.

Industry watchers agree this calendar year will be a tough one for the smartphone industry, following modest growth in 2025 when Omdia says shipments hit 1.25 billion units worldwide.

However, rising memory prices due to shortages have started to affect the market, with mounting cost pressures expected to be a defining factor throughout 2026, forcing vendors to focus on pricing discipline, profitability, and operational efficiency.

"All vendors are utilizing mitigating tactics by emphasizing long-term partnerships, for example, utilizing scale to secure capacity, and focusing on their supplier base," said Omdia senior analyst Runar Bjørhovde.

"The situation is particularly critical for vendors with heavier exposure to entry-level smartphones, which are highly price elastic and where memory and storage costs make up a higher share of ...