(Credit: PCMag/Michael Kan)
If you’re preparing to buy a phone next year, start saving now. The ongoing memory shortage means you might have to pay $70 more for a new smartphone, according to research firm IDC.
The memory crunch has already sent DDR5 RAM prices through the roof. But on Tuesday, IDC warned that the “the ongoing global memory shortage is expected to constrain supply and raise prices” for smartphones into 2026.
IDC analyst Anthony Scarsella tells us that the global average selling price (ASP) for phones reached $440 in Q3. "Next quarter we project they will reach $511," he says, as tech giants hoard GPUs for their AI data centers.
For the full year in 2026, IDC projects the ASP will reach $465, up from $457 for 2025. Smartphone vendors might try to offset the surge in memory costs by trimming expenses elsewhere. “The list of components that can be downgraded is extensive. Vendors will need to choose where to cut or raise prices to keep up with costs,” Scarsella says.
Another likely outcome is a shift toward higher-end devices, which offer better margins and can absorb the financial hit from skyrocketing memory prices. As a result, IDC expects the memory shortage to impact "low-to-midrange Android devices more significantly as they remain more price sensitive.”
On the bright side, Scarsella notes that the US market already leans toward premium phones, especially iPhones, giving vendors “more room in the margins” to weather the spike. That said, many higher-end phones now include AI-powered features, which require more memory.
The higher pricing is bound to hurt global demand, with IDC projecting smartphone shipments to fall by 0.9% in 2026. But on the flip side, IDC says the smartphone market could reach a “record high of $579 billion” in terms of value, if the higher pricing becomes a reality.
“Next year will be a challenging time for the industry, however, IDC still believes the market could see record ASPs,” Scarsella adds.
IDC’s predictions echo earlier warnings from Counterpoint Research, which also flagged potential price hikes on phones due to the memory shortage. “We are talking here about big increases to smartphone BoMs [bill of materials]—upwards of 15% in the case of some models —across the key mid-to-high-end segments, eating into margins or affecting growth. It will probably be both,” Counterpoint analyst Ivan Lam said at the time.
AI demand shows no signs of letting up, so there’s growing concern the memory shortage will persist for years and hit all kinds of electronics, including SSDs, graphics cards, PCs, and even cars.