A new industry forecast indicates that global smartphone prices are expected to remain high for the foreseeable future, potentially until 2028. This sustained price pressure is primarily attributed to a continuing memory component shortage, which is forcing manufacturers to re-evaluate their product strategies and disproportionately affecting the market for affordable devices.
Rising Memory Costs Drive Up Device Prices
The global smartphone market is navigating a challenging period marked by both declining shipments and escalating component costs. While the immediate impact on daily smartphone use might be minimal, consumers can expect fewer options in the entry-level segment and higher prices for new launches. Memory prices, a critical factor in smartphone manufacturing, are projected to continue their upward trend until at least 2028. Consequently, average selling prices are only expected to see a modest annual decline of 1-2% from 2028 onwards, meaning next year's models could very well cost more than their predecessors.
Shipment Declines and the Threat to Cheap Smartphones
IDC has revised its forecast for the 2026 global smartphone market, predicting a significant 16.7% year-on-year decline, a sharper drop than its previous 13.9% estimate. This translates to roughly 200 million fewer smartphones, with the latter half of the year expected to bear the brunt of the intensifying memory shortage.
The segment of smartphones priced under $100 faces an existential threat. Last year, approximately 173 million such devices were shipped. However, manufacturers are now actively reducing their production of low-end models due to thin profit margins, shifting resources towards more expensive devices. This budget segment saw an almost 60% year-on-year decline in Q2 2026, a trend expected to accelerate. Emerging markets are also anticipated to experience a decline of over 20% this year, further squeezing the mass-market smartphone sector and potentially leading to fewer affordable choices and longer replacement cycles for consumers.
Premium Brands Show Resilience
In contrast, premium smartphone brands like Apple, Samsung, and Huawei are expected to demonstrate greater resilience amidst these market shifts. Their larger scale, stronger pricing power, and the prevalence of long-term interest-free financing options in developed markets (such as the US and UK) provide them with a competitive edge. IDC suggests that the next 18 months will be crucial, separating companies capable of operating with structurally higher costs from those that cannot. Smaller Android brands heavily focused on entry-level devices may struggle to survive this challenging period.
By the time memory supply stabilizes around 2028, IDC forecasts a smartphone market that, while smaller in terms of units, will be larger in value and more concentrated among top-tier manufacturers. Foldable smartphones remain a notable bright spot, with shipments projected to grow 12.6% to 22.9 million units in 2026, potentially reaching around 27 million in 2027, partly fueled by Apple's anticipated entry into the foldable category.