IDC Report Predicts Surging Smartphone Prices Due to Global RAM Shortage

The smartphone industry is on the brink of significant changes as a global shortage of RAM and memory chips threatens to push device prices higher and reduce overall shipments, according to the latest analysis from IDC.

In a report published on February 26, 2026, IDC has dramatically revised its forecasts for the worldwide mobile phone market. Shipments are now expected to fall by 12.9 percent year over year in 2026, reaching just 1.12 billion units. This would represent the largest annual decline on record and the lowest shipment volume in more than a decade.

Simultaneously, the average selling price of smartphones is forecasted to climb 14 percent to an all-time high of 523 dollars. While this price increase may help stabilize revenues, which are projected to decline only slightly by 0.5 percent, it signals challenges for consumers and manufacturers alike.

The shortage stems primarily from explosive demand for memory chips in AI data centers. Major technology companies have diverted supplies to support their artificial intelligence infrastructure, leaving consumer device makers scrambling for DRAM and NAND components essential for smartphones.

"What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain," commented Francisco Jeronimo, vice president for Worldwide Client Devices at IDC.

"The memory crisis will cause more than a temporary decline. It marks a structural reset of the entire market, fundamentally reshaping the long-term total addressable market, the vendor landscape, and the product mix," added Nabila Popal, senior research director with IDC's Worldwide Quarterly Mobile Phone Tracker.

This update is far more pessimistic than IDC's December 2025 outlook, which projected declines of up to 5.2 percent in the worst-case scenario. The intensification of the crisis has accelerated price hikes, with some Android manufacturers already announcing increases of 10 to 20 percent in early 2026.

Particularly vulnerable is the low-end market. The sub-100-dollar smartphone segment, responsible for 171 million shipments in 2025, is set to become permanently uneconomical. Even as memory prices are expected to stabilize by mid-2027, they will not revert to prior levels, making budget devices unsustainable for many smaller vendors.

Larger players such as Apple and Samsung, with stronger supply chain relationships and financial resources, are better positioned to weather the storm and may capture additional market share. In contrast, smaller and regional brands could face exits or forced shifts to higher price tiers.

For end users, the implications include paying more for smartphones or accepting lower specifications, such as reduced RAM or storage capacities. This shift could lead to longer device lifespans, increased interest in refurbished phones, and slower penetration in developing regions where affordability is key.

IDC anticipates the memory supply challenges to continue through 2026 and well into 2027. A modest recovery with 1.9 percent shipment growth is projected for 2027, accelerating to 5.2 percent in 2028.

As the industry adapts, manufacturers may explore ways to optimize memory usage or invest in alternative technologies. However, for the immediate future, consumers should prepare for a more expensive and potentially less feature-rich smartphone market.