Research firm IDC predicts that the surge in memory demand for computers and data centers used for AI is triggering a severe shortage of global RAM supply and pushing up memory prices several times. This chain reaction will cause global smartphone shipments to plummet by 12.9% in 2026, the largest annual decline in more than a decade. According to the latest data from IDC, mobile phone manufacturers will ship about 1.26 billion smartphones in 2025, while this number is expected to drop to only 1.12 billion units this year.
Nabila Popal, senior research director of IDC's global quarterly mobile phone tracking project, said that this "memory crisis" not only means a short-term decline in shipments, but also a structural reset of the entire market, which will fundamentally reshape the long-term serviceable market size (TAM), manufacturer structure and product structure of the smartphone industry. In her view, limited supply combined with soaring costs will force the market to accelerate reshuffle, and small and medium-sized brands will face greater pressure.
As memory prices soar, the average selling price of smartphones is also forced to rise. IDC predicts that the average selling price of global smartphones will increase by 14% year-on-year in 2026, reaching a record high of US$523. Popal pointed out that at current component cost levels, smartphones selling for less than $100 may become "permanently uneconomical," making it difficult for manufacturers to continue to launch products with reasonable profits in this price range. This means that the global entry-level market and price-sensitive user groups will face limited choices or even be forced to extend the replacement cycle.
At the regional level, IDC predicts that the Middle East and African markets will bear the brunt, with smartphone shipments likely to decline by more than 20% year-on-year this year. The Asia-Pacific region except Japan and the Chinese market are also difficult to survive alone, with shipments expected to decline by approximately 13.1% and 10.5% respectively. For emerging markets that rely heavily on mid- to low-priced models to drive sales, the impact of memory price increases combined with machine price increases is particularly obvious.
In fact, another analyst firm, Counterpoint, has previously lowered its forecast for smartphone shipments in 2026, but its predicted decline is only 2.6%, which is significantly lower than the current pessimistic judgment given by IDC. As memory prices continue to rise and deliveries are tight, the gap in expectations among institutions is widening, which also reflects that the industry's views on the duration and depth of the supply shock have not yet fully converged.
In addition to research institutions, machine manufacturers have also felt the pressure. Carl Pei, co-founder and CEO of the start-up mobile phone brand Nothing, warned earlier this year that with the sharp increase in the cost of memory modules for smartphones, mobile phone terminal prices are bound to rise in 2026. He bluntly said that brands now have almost only two options: either to increase the price of some models by 30% or more, or to reduce configurations to control costs. In his view, the "buy more configurations with less money" model that has long supported the rise of many cost-effective brands will be unsustainable in 2026.
Pei Yu also predicts that in such a cost environment, the entry-level and mid-range markets in some countries and regions may shrink by 20% or more. Brands that have relied heavily on these price segments in the past and occupied the market with cost-effective strategies will face severe challenges in the new round of reshuffle. This echoes IDC’s judgment that small and medium-sized manufacturers will be forced to exit and the industry will move towards further concentration.
IDC believes that the root cause of this surge in memory prices is that the AI wave has pushed up the memory demand for servers and high-performance computing equipment, seizing the supply space for consumer electronics products including smartphones. However, the agency also gave certain time guidance: if the pace of industrial expansion and demand growth gradually return to balance, RAM prices are expected to stabilize around mid-2027. Prior to this, smartphone manufacturers will have to make difficult trade-offs between price increases, product reduction and profit compression, while consumers will need to adapt to a new normal of a "more expensive, less" mobile phone market.