A new report from Counterpoint Research warns that smartphone buyers will face significantly higher price tags in 2026 as a severe shortage of memory chips sends production costs skyrocketing.
Counterpoint Research Warning
The intelligence firm has revised its global shipment forecast downward, predicting a 12.4% year-over-year decline. This downturn is driven primarily by a “supply-driven memory crunch,” as chip manufacturers divert resources toward high-margin AI infrastructure and data centers, which may leave smartphone makers scrambling for components.
Budget Models Hit Hardest
The supply chain impact has led to a 25% increase in Bill of Materials (BoM) costs for low-end smartphones and 15% and 10% for mid-range and premium devices, respectively. Analysts predict an additional 10% to 15% rise through Q2 of 2026. Counterpoint Senior Analyst Yang Wang stated that unsustainable price increases in lower price bands may force manufacturers to adjust their product portfolios if costs can’t be passed to consumers.
Market Shift and “Spec” Downgrades
To address rising costs, many Android OEMs are increasing retail prices by 10% to 20% and engaging in “spec-sheet engineering,” which involves reducing RAM, using older display panels, and downgrading camera modules.
While companies like Apple and Samsung can adapt due to their strategies, the sub-$200 segment is projected to shrink by over 20%. Experts caution that the high-value entry-level smartphone era may be concluding as the industry experiences a lasting structural shift.
Started his freelancing adventure in 2018 and began doing freelance Audio Engineering work and then started freelance writing a few years later.
Currently he writes for Gadget Pilipinas and Grit.PH.
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