Global smartphone shipments may shrink in 2026 due to RAM shortages and rising costs

Industry research firm Counterpoint Research has revised its outlook for the global smartphone market, now projecting a slight contraction in shipments in 2026. The adjustment is largely due to a sharp rise in memory chip prices, especially for DRAM (RAM) used in smartphones, as supply tightens against booming demand from artificial intelligence (AI) data centres and other high-end computing sectors.

This shift in memory supply dynamics is expected to ripple through the smartphone value chain, affecting device costs, configurations, and overall market volume. Xiaomi's President also echoed the same sentiment, followed by HONOR, regarding the tablet price hike news yesterday.

Cost Pressures

Counterpoint’s updated forecast estimates that global smartphone shipments could fall about 2.1% in 2026, a downgrade from earlier projections that anticipated flat or modest growth. One of the key drivers behind this shift is a significant increase in memory prices, which has been compounded by high industry demand for memory chips and constrained production capacity.

As DRAM and related memory components become more expensive and less available for consumer electronics, manufacturers are seeing their bill of materials (BoM) costs rise sharply. The impact is most pronounced in the budget and low-end segments, where margins are thin and even modest increases in memory costs can significantly affect profitability.

At the same time, mid-range and premium devices have also seen cost inflation, pushing up average selling prices (ASPs) across the industry. This squeeze has complicated inventory planning and pricing strategies for brands around the world.

Market Effects

Smartphone makers are already adjusting to rising component costs in several ways. Some firms are trimming specifications on upcoming models, including reducing RAM capacities or opting for older, lower-cost components to maintain attractive price points. Others may raise the launch prices of new devices to preserve profit margins, as seen with recent flagship releases that entered the market at higher prices than their predecessors.

For larger players with stronger supply chain leverage and financial resources, such as Apple and Samsung, navigating the memory supply crunch may be less disruptive than for smaller or more price-sensitive brands. These established companies can often secure better contracts and absorb cost increases without drastically altering product roadmaps.

Broader Implications

The anticipated shipment dip reflects broader supply chain stress across the tech sector, where memory chips are increasingly prioritised for high-value AI infrastructure at the expense of consumer devices. As a result, the smartphone industry faces a period of recalibration in 2026, marked by higher component costs, potential specification trade-offs, and elevated pricing for end consumers.

Although a slight contraction in shipment volumes might appear modest on a global scale, it represents a notable shift for a market that has seen relatively consistent growth over the past decade. So with that, expect to see higher prices across all kinds of devices in 2026. Stay tuned for more trending tech news at TechNave.com.