Overview
- Omdia’s report this week showed memory now makes up about 60% of the bill of materials for phones under $400 and about 64% for ultra‑budget models below $99, roughly double its share since Q3 2025.
- The research forecasts a greater than 22% year‑over‑year drop in shipments of sub‑$400 smartphones and a 12% decline in the overall global smartphone market in 2026.
- Manufacturers are responding by quietly raising retail prices, trimming components such as displays and camera sensors, reusing last‑generation system chips, or scaling back low‑end product lines to protect tiny margins.
- The squeeze is driven in part by chipmakers shifting wafer starts toward high‑bandwidth memory for AI data centers, and although South Korea, Samsung, SK hynix and others have announced large fab investments, analysts say those projects will not ease consumer memory shortages until mid‑2027 or later.
- The fallout will hit emerging‑market buyers hardest by shrinking affordable choices and slowing hardware upgrades, likely pushing some consumers toward discounted older models or higher‑priced midrange phones and changing competitive dynamics in the Android market.