The increasing flow of data centers dedicated to AI is causing a massive shortage of RAM, leading to a surge in prices. IDC expects this to lead to a drastic drop in smartphone shipments of around 12.9% this year - the biggest drop in a decade.
Earlier this year, IDC reported that manufacturers shipped 1.26 billion devices in 2025. The firm expects that figure to fall to just 1.12 billion this year, Techradar writes.
„The memory crisis will cause more than a temporary downturn; it marks a structural reset of the entire market, fundamentally reshaping the long-term TAM [total addressable market], vendor landscape and product mix” said Nabila Popal, senior research director at IDC's Worldwide Quarterly Mobile Phone Tracker, in a statement.
Popal said that due to the lack of memory, the average retail price of a smartphone is expected to increase by 14%.
„We expect consolidation as smaller players pull back and low-end vendors face sharp drops in shipments amid supply constraints and lower demand at higher prices. While shipments will see a record drop, the average selling price of smartphones is expected to rise by 14% to a record $523 this year”she added.
Popal also noted that rising component costs could make sub-$100 smartphones unprofitable, with prices for phone makers that make devices at that price point expected to rise.
The firm said that because of this trend, deliveries to the Middle East and Africa will fall by more than 20% year-on-year. China and the Asia-Pacific region (excluding Japan) will also see decreases of 10.5% and 13.1% respectively.
IDC added that it expects RAM prices to stabilize by mid-2027.
Last year, another analyst firm, Counterpoint, also forecast a decline in smartphone shipments, but projected a smaller drop of just 2.6%.
Earlier this year, Carl Pei, co-founder and CEO of Nothing, also warned that smartphones will cost more in 2026 as smartphone memory costs rise. „Brands now face a simple choice: raise prices by 30% or more in some cases, or downgrade specifications. The «more specs for less money» model on which many value brands have been built is no longer sustainable in 2026”he said.
„As a result, some markets, particularly the entry and mid-tier segments, are likely to shrink by 20% or more, and brands that have historically dominated these segments will struggle”Pei added.