•Smartphones
International Data Corporation (IDC), a technology market research and intelligence firm, has said that the days of cheap smartphones are rapidly ending and will not return.
“The smartphone market has changed character this year. Units are dropping while prices are climbing sharply, with consumers expected to absorb the cost,” IDC said.
“According to IDC’s Worldwide Quarterly Mobile Phone Tracker, worldwide smartphone shipments will fall 16.7% in 2026 to just over 1 billion units.”
That is a sharp downgrade from the 13.9% decline IDC forecast only one quarter ago, and it is the steepest annual contraction the industry has ever recorded, reports Daily Independent.
“What makes this moment unusual is that the market is shrinking and getting more valuable at the same time,” IDC said.
“Total market value will still grow 6.3% to $613 billion, because higher prices are now doing the heavy lifting that volume once did.”
IDC explained that the memory shortage, which started in late 2025, was striking hard in the second half of 2026, with shipments forecast to drop by 27.2% year on year.
NAND and DRAM costs continue to rise, up over 300% year on year, and vendors are running out of options to absorb the increased costs.
“As memory prices are expected to continue increasing until at least 2028, vendors are adapting their portfolios to a permanently higher cost structure,” IDC said.
“The 173 million smartphones below $100, which shipped last year, are facing an existential crisis.”
IDC said its forecast for smartphone prices has moved the most in the past quarter as the AI-induced shortage of memory chips continued to bite.
“The average selling price of a smartphone will reach $581 in 2026, up 27.6% in a single year and revised upward from the $550 projected last quarter,” it said.
“More brands are passing the increased cost to the end consumer, with prices rising faster than expected.”
The premium end will remain more resilient to price hikes because long-term interest-free financing options are more prevalent in developed markets such as the US and the UK.
