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Rising Memory Prices Threaten Global Smartphone Market in 2026
The global smartphone market is bracing for a significant downturn in 2026, primarily driven by escalating memory prices. Research firm TrendForce forecasts a notable reduction in device shipments, with a worst-case scenario predicting a double-digit decline in global deliveries. This challenging outlook stems from a critical shortage of memory components and their rapidly increasing share in the overall cost of phone manufacturing.
Global Smartphone Shipments Face Projected Decline
According to TrendForce’s latest estimates, worldwide smartphone shipments are expected to drop by approximately 10% in 2026, reaching around 1.135 billion units. In a more pessimistic forecast, dubbed the “bear case” by analysts, this decline could be as severe as 15%, resulting in roughly 1.061 billion devices shipped.
This anticipated downturn marks a distinct change from the relatively stable conditions observed in 2025, which saw modest market growth. Prior estimates for 2025 projected shipments of 1.24-1.26 billion smartphones to retailers, with an annual growth rate of approximately 2%.
Memory Components: A Growing Share of Production Costs
The most substantial cost pressure on smartphone manufacturers is originating from memory components, encompassing both operational (RAM) and built-in storage. TrendForce data highlights a dramatic shift:
- Historically, memory accounted for about 10-15% of a device’s total component cost.
- Currently, this share is estimated to have surged to between 30-40%.
This substantial increase presents a significant challenge for manufacturers, especially those operating in the budget smartphone segment. Higher component costs directly translate to reduced profit margins. Consequently, many companies will be compelled to make difficult decisions, either by increasing device prices or by compromising on specifications to maintain profitability.
Uneven Impact Across Smartphone Manufacturers
The effects of rising memory prices will not be uniformly felt across the industry:
Manufacturers in a Better Position
- In-house Production & Long-Term Agreements: Companies that produce some of their own components or have established long-term supply contracts are better equipped to control costs and ensure production continuity.
- Premium Segment Brands: Manufacturers with a strong presence in the premium smartphone market tend to be more resilient. Their customer base is typically more willing to accept higher prices for new, high-end models.
Manufacturers Facing Greater Challenges
- Mass-Market & Budget Segments: Companies focused on these price-sensitive segments will face significant difficulties. Customers in these markets are less tolerant of price increases, leaving limited room for manufacturers to absorb higher costs.
- Strategic Adjustments: For these major players, a likely strategy will be to reduce the number of new models introduced to the market, streamlining their offerings to manage rising expenses.
Frequently Asked Questions (FAQ)
Q1: Why are memory prices increasing?
A1: The article points to a general “shortage of memory” as the primary reason for rising prices, alongside increased demand and manufacturing complexities.
Q2: How will this affect smartphone consumers?
A2: Consumers may experience higher prices for new smartphones, especially in the budget and mid-range segments, or find that new models offer slightly lower specifications than previously for the same price point.
Q3: Which smartphone brands will be most affected?
A3: Manufacturers heavily reliant on the mass-market and budget segments, with less control over their component supply chain, are expected to be most impacted. Premium brands and those with in-house component production may be less affected.
Q4: Is this decline a long-term trend?
A4: The article specifically forecasts impacts for 2026. While it doesn’t predict beyond that, market dynamics for memory components can be volatile. Continued monitoring of supply, demand, and manufacturing capabilities would be necessary to assess long-term trends.
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