An IDC report reveals that smartphone shipments this year are expected to plunge due to AI industry's demand for RAM, which has increased component costs, potentially causing budget smartphones to vanish permanently from the market.
Market research firm IDC forecasts that global smartphone shipments in 2026 could drop by 12.9%, marking the largest decline in over a decade. Shipments are expected to fall from 1.26 billion units last year to just 1.12 billion this year. This phenomenon is seen not merely as a temporary slowdown but as a complete market restructuring affecting both smartphone manufacturers and product mix.
Notably, this impact is expected to directly affect consumers. IDC estimates that rising component costs may render budget smartphones priced under $100 unprofitable to produce. This pressure may force smaller smartphone makers to exit the market permanently and cause brands targeting the low-end segment to be unable to absorb costs, especially in the Middle East and Africa where shipments are predicted to decline by over 20%. Meanwhile, China and the Asia-Pacific region are expected to see reductions of about 10.5% and 13%, respectively.
Currently, the AI industry is experiencing a strong demandfor additional memorysuch as RAM, to be used in computers and data centers for AI processing, causing a major storm for the global smartphone industry.
Carl Pei, CEO and founder of Nothing, commented that smartphone makers in 2026 face a tough choice between raising prices by 30% or lowering specifications to keep prices stable. The "high-spec, low-price" business model many brands used to establish themselves will no longer be sustainable under current conditions.
However, the RAM shortage crisis is not expected to last indefinitely and should start returning to normal by mid-2027.
Source:IDC,9to5Google