IDC: Memory crisis will collapse the smartphone market and make it impossible to release models for $100

The growing demand for resources for artificial intelligence systems has provoked a shortage of RAM and a jump in component prices. According to IDC, this will lead to a drop in global smartphone shipments by 12.9% this year – the largest ever.

A few hours after the publication of the report, Counterpoint Research presented a similar estimate. The company’s analysts expect a market reduction of 12%.

Earlier, IDC reported that in 2025, manufacturers shipped 1.26 billion devices. This year, the volume may decrease to 1.12 billion.

IDC Senior Research Director Nabila Popal called what is happening not a short-term decline, but a “structural reset” of the market, which will affect the long-term addressable market volume (TAM), the arrangement of suppliers and product lines.

Smartphones under $100 become unprofitable

According to IDC, the average retail price of a smartphone will increase by 14%. The increase in the cost of components may make the production of models cheaper than $100 economically unviable.

Analysts expect consolidation in the industry: small manufacturers will leave the market, and brands focused on the budget segment will face a sharp reduction in supplies due to limited memory supply and reduced demand at higher prices.

Despite the decline in volumes, the average selling price (ASP), according to IDC, will grow by 14% – to a record $523.

Regional dynamics will also be negative. Shipments in the Middle East and Africa could decline by more than 20% year-on-year. China is expected to see a 10.5% decline, while Asia Pacific (excluding Japan) is expected to see a 13.1% decline. IDC does not expect RAM prices to stabilize until mid-2027.

Counterpoint notes that the premium segment will be more resilient, while models under $200 could lose up to 20% of their volume.

Manufacturers are already adjusting strategies

IDC’s chief analyst Yang Wang said that the impact of the crisis could last until the second half of 2027 – it will take several quarters to expand memory production. The supply of LPDDR4 is shrinking especially quickly, which is hitting budget devices harder.

According to IDC, some Android manufacturers have already raised prices by 10-20% in January 2026, and have also reduced model lines, postponed launches and revised device specifications.

The co-founder of Nothing, Carl Pei, previously warned about the possible increase in the price of smartphones in 2026. According to him, brands will have to either raise prices in some cases by 30% or more or worsen specifications. The “more features for less money” model is no longer sustainable.

The market is shifting to more expensive and used devices

IDC also expects the smartphone segment to grow amid price volatility. As new models become more expensive, consumers will more often choose either second-hand devices or more expensive, but better-equipped models.

Analysts agree that the memory crisis is changing the structure of the market. The budget segment may shrink significantly, and competition will shift from the minimum price to a balance of performance, memory volume and cost. If the forecasts are confirmed, 2026-2027 will be a turning point for the smartphone industry.