Budget Smartphone Shipments Forecast to Drop 22 Percent in 2026 While Higher-Priced Models Grow

Global shipments of smartphones priced below $400 are projected to fall 22 percent year over year in 2026, according to analysis published this week by technology research firm Omdia. The decline is expected to pull overall smartphone shipments down 12 percent for the year, even as models priced above $400 grow 5.7 percent.

Memory costs now represent nearly 60 percent of the total bill of materials for phones under $400 and more than 64 percent for those priced below $99, Omdia said.

The firm stated that low-end products are already becoming unprofitable and face a high risk of weakening demand as retail prices continue to rise. Omdia attributed the cost increase to heavy purchases of DRAM and NAND chips by companies building AI data centers. Global brands including OPPO and Xiaomi are under pressure to raise retail prices to protect margins, the report said.

Apple raised prices on many Macs and iPads by as much as $300 in response to the memory costs. Microsoft will increase Xbox console prices by $100 to $150 beginning August 1, citing memory and storage costs that have risen more than 2.5 times. Valve set a $1,049 starting price for its Steam Machine living-room PC.

Dell and Lenovo raised PC prices between 15 percent and 20 percent in December 2025 and January 2026. Alex Baldock, CEO of British retailer Currys, said shoppers should expect higher prices on smartphones and laptops later in 2026. Apple has not raised iPhone prices in 2026, though many expect the starting price of the next generation to increase when the models are unveiled in the fall.