Buying a new smartphone could become more expensive in 2026. A growing shortage of memory chips and the explosive rise of artificial intelligence infrastructure are expected to push smartphone prices higher across the world.
According to new data from Counterpoint Research, the global average selling price of smartphones may increase by nearly 7 percent in 2026. The main reason is simple. Chipmakers are prioritizing AI over consumer electronics.
Key Takeaways
- Smartphone prices could rise by about 6.9 percent globally in 2026
- Shortage of DRAM is the biggest reason
- AI data centers are consuming most high performance memory
- Budget phones under ₹15,000 will be affected the most
- Some 2026 phones may offer lower specs at higher prices
Why Is This Happening?
AI data centers run by companies like Google, Microsoft, and Nvidia need huge amounts of high performance memory. These companies are ready to pay premium prices for advanced DRAM and cutting edge chips to train AI models.
As a result, memory manufacturers such as Samsung, SK Hynix, and Micron are shifting production away from smartphones and laptops. Micron has already confirmed that it will stop selling some consumer memory products by early 2026 to focus fully on AI demand.
This shift leaves smartphone brands competing for fewer components at much higher prices.
Budget Phones Will Be Hit the Hardest
Premium brands like Apple and Samsung have long term supply contracts and higher profit margins, so they can absorb some of the cost increase. Budget focused brands do not have that flexibility.
Phones priced under ₹15,000 are expected to see the biggest impact. In fact, the cost of parts for low end smartphones has already gone up by 20 to 30 percent in 2025. By mid 2026, memory prices alone could rise another 40 percent.
To manage this, brands may take a few steps:
- Use older processors
- Reduce RAM from 8GB to 4GB
- Cut back on display and camera quality
- Increase final retail prices
Pressure on Advanced Processors Too
The problem is not limited to memory. TSMC, the company that makes most of the world’s advanced chips, is running close to full capacity on its 3nm manufacturing lines. These same factories are used for both AI chips and flagship smartphone processors.
Since AI chips generate more profit, smartphone companies often have to pay extra fees for faster production, which again adds to the final phone price.
What This Means for Indian Consumers
For Indian buyers, the era of ultra affordable 5G smartphones may slow down. Brands like Xiaomi, Realme, Poco, Motorola, and Oppo operate on very thin margins, especially in the entry level segment.
Industry analysts believe many users will delay upgrading their phones in 2026, leading to a drop in global smartphone shipments by over 2 percent.
Should You Buy a Phone Now?
If you are planning to buy a budget or mid range smartphone, 2025 could be a better time. In 2026, you may end up paying more for similar hardware or even slight compromises in performance and storage.
