Smartphone prices may stay high through 2028 as memory crisis threatens cheap phones

The global smartphone market is entering a difficult phase as manufacturers balance falling shipments against rising component costs. While a decline in shipments may not immediately affect your daily smartphone use, it could influence what brands launch and how much you pay for an upgrade. 

The latest industry forecast points to growing pressure on affordable devices, while premium smartphones are expected to remain relatively resilient. For you, that could mean fewer choices in the entry-level segment and higher prices across new launches. 

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The situation is also forcing manufacturers to rethink their product portfolios as memory costs remain elevated and competition becomes increasingly concentrated at the top of the market.

Smartphone shipments face a sharper decline

IDC has revised its forecast for the 2026 global smartphone market, predicting a 16.7% year-on-year decline, compared with its previous 13.9% estimate. That represents a drop of around 200 million smartphones, with the second half expected to take the hardest hit as the memory shortage intensifies.

For you, pricing is the bigger concern. Memory prices are expected to continue increasing until at least 2028, while average selling prices are forecast to decline by only around 1-2% annually from 2028. In other words, smartphones launching next year could cost more than this year's models.

Cheap smartphones face an existential crisis

The pressure is particularly severe below $100. Around 173 million smartphones priced under $100 shipped last year, but manufacturers are now cutting low-end models and shifting towards more expensive devices as margins remain thin. The segment recorded an almost 60% year-on-year decline in Q2 2026 and is expected to fall faster in the second half.

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Emerging markets are also expected to decline by more than 20% this year, putting additional pressure on the mass-market segment. For you, this could translate into fewer affordable smartphone options and longer replacement cycles.

Apple, Samsung and Huawei better placed

Premium smartphones are expected to be more resilient because long-term interest-free financing is more common in developed markets such as the US and UK. IDC says the next 18 months will separate companies that can operate with structurally higher costs from those that cannot. Apple, Samsung and Huawei have greater scale and pricing power, while some smaller Android brands focused on entry-level devices may not survive.

When memory supply stabilises in 2028, IDC expects the market to be smaller in units, larger in value and more concentrated at the top. Foldables remain the bright spot, with shipments forecast to grow 12.6% to 22.9 million units in 2026 and reach around 27 million in 2027, helped by Apple's expected entry into the category.