Smartphone prices are expected to increase significantly in 2026 due to an AI-driven memory shortage, according to a December 2025 report from International Data Corporation (IDC). The culprit behind this price hike is the reallocation of Random Access Memory (RAM) manufacturing away from consumer devices like smartphones and PCs toward AI data centers that require massive amounts of processing power.
As companies increasingly adopt AI tools and infrastructure, the demand for reliable processing power has skyrocketed, leading to unprecedented consumption of RAM resources. IDC projects that DRAM (Dynamic Random Access Memory) supply growth will fall below historical norms in 2026, reaching only 16% year-on-year growth—a significant constraint that will impact the entire consumer electronics industry.
The memory shortage will hit major smartphone manufacturers hard, including Apple, Google, and Samsung. As these companies struggle to secure affordable RAM supplies, their production costs are expected to rise substantially, forcing them to pass these increases on to consumers. IDC senior research director Nabila Popal warned that this “upcoming memory crisis” will “hit the market hard,” leaving vendors with “almost no choice but to pass the increased cost to consumers.”
Market analysis firm Counterpoint Research paints an even grimmer picture, projecting global smartphone shipments to decrease 2.1% in 2026. The firm estimates that memory prices could surge by 40% through the second quarter of 2026—a dramatic increase considering that a device’s memory typically represents 10% to 20% of the total bill of materials.
The impact won’t be felt equally across all market segments. According to Counterpoint senior analyst Yang Wang, larger manufacturers with diverse product portfolios will be better positioned to weather the storm. “Apple and Samsung are best positioned to weather the next few quarters,” Wang noted, while warning that companies without as much flexibility in managing market share versus profit margins will face significant challenges. Lower-end markets will likely be hit the hardest, potentially limiting smartphone access for budget-conscious consumers.
Despite these advantages for major players, Counterpoint predicts that average selling prices will increase by 6.9% across the board. For consumers eyeing premium devices like the iPhone 17 Max, this could translate to a price increase from $1,199 to approximately $1,281 for the base model—an $82 premium directly attributable to AI’s growing infrastructure demands.
Key Quotes
In the case of the upcoming memory crisis, this is something that will hit the market hard. Those vendors will have almost no choice but to pass the increased cost to consumers.
IDC senior research director Nabila Popal warned CNET about the severity of the RAM shortage, emphasizing that smartphone manufacturers will be forced to raise prices due to AI data centers consuming memory supplies that would traditionally go to consumer devices.
Apple and Samsung are best positioned to weather the next few quarters. But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins.
Counterpoint senior analyst Yang Wang explained how the memory crisis will disproportionately affect smaller manufacturers, while tech giants with diverse product portfolios and stronger financial positions can better absorb the increased costs without sacrificing market position.
Our Take
This RAM shortage represents a watershed moment in the AI revolution’s real-world impact on consumers. While much discussion around AI focuses on job displacement or productivity gains, this story reveals how AI infrastructure demands are creating tangible economic ripple effects across seemingly unrelated industries. The 40% memory price increase projected through Q2 2026 is staggering and suggests that semiconductor manufacturers are prioritizing the lucrative AI data center market over traditional consumer electronics. This could accelerate a troubling trend: AI benefits accruing primarily to large enterprises while costs are distributed to everyday consumers. The potential market consolidation—with Apple and Samsung strengthening their positions while smaller manufacturers struggle—may reduce innovation and consumer choice long-term. This situation also raises questions about sustainability and resource allocation in the tech industry as AI’s appetite for computing resources grows exponentially.
Why This Matters
This development represents a critical inflection point where AI infrastructure demands are directly impacting consumer technology prices, marking one of the first tangible ways average consumers will feel the cost of the AI revolution. The RAM shortage illustrates how AI data centers are competing with consumer electronics for finite manufacturing resources, creating supply chain tensions that could reshape the smartphone industry.
The implications extend beyond just higher prices. A 2.1% decline in global smartphone shipments suggests market contraction, potentially slowing the pace of mobile innovation and widening the digital divide as budget devices become less viable. For the AI industry, this highlights the infrastructure bottlenecks that could constrain growth if semiconductor manufacturing capacity doesn’t expand rapidly enough.
This situation also reveals the hidden costs of AI adoption—while businesses invest heavily in AI capabilities, consumers may inadvertently subsidize this transformation through higher device prices. The fact that major players like Apple and Samsung are best positioned to weather this crisis could lead to further market consolidation, reducing competition and consumer choice in the smartphone sector.
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