Memory Price Spike Shrinks Budget Smartphone Market

Overview

• Omdia’s market analysis shows memory costs rose sharply into Q1 2026, pushing DRAM and NAND to nearly 60% of bill‑of‑materials for phones under $400 and to about 64% for devices under $99.
• That jump in memory share has coincided with a greater than 22% year‑on‑year drop in shipments of sub‑$400 phones and underpins Omdia’s forecast for a roughly 12% global smartphone market decline in 2026.
• Manufacturers are trimming costs on displays, camera modules, radio‑frequency components and by using older system chips to protect margins on low‑priced models.
• Higher‑priced phones appear more resilient because wealthier buyers are less price sensitive and makers have more room to substitute parts, giving shipments above $400 relative stability.
• The squeeze will reduce choices for price‑sensitive buyers, hurt OEM margins in value markets, and could push further price rises or production cuts into later 2026 and possibly 2027.