Global Smartphone Shipments to Drop 15% in 2026 as AI-Driven Memory Costs Push Prices Higher, Says CCS Insight

Global smartphone shipments are projected to decline by 15% in 2026, driven by soaring memory prices linked to AI infrastructure demand, according to research firm CCS Insight. Entry-level phones have seen price hikes exceeding 50% since 2025, with the primary smartphone market shrinking 4.4% in the first quarter of 2026, despite inventory stockpiling by carriers, the firm reported.

Why Are Smartphone Prices Rising in 2026?

The surge in smartphone prices stems from increased demand for memory components to support AI infrastructure, according to CCS Insight analyst Ben Hatton. Chipmakers are prioritizing high-margin memory for AI servers over standard DRAM and NAND used in consumer devices, creating a supply imbalance. “Memory components now account for over 30% of the bill of materials in some smartphones,” Hatton said. This shift differs from traditional market cycles, where price spikes result from supply shortages rather than demand-driven pressure.

How Has the Used Phone Market Responded?

The secondary market for used phones is growing at a 15% annual rate as consumers seek affordability, CCS Insight predicts. However, supply constraints persist due to extended device replacement cycles—many users now keep phones for over four years, up from the typical two. “The secondary market has potential to offset primary market shortfalls, but supply remains a challenge,” Hatton noted. Europe faces slower growth, with less than a third of consumers participating in trade-in programs.

What Factors Are Affecting Smartphone Shipments?

Shipments have been under pressure since early 2026, with forecasts evolving rapidly. Initial projections in January 2026 anticipated a 6–8% price increase and a 5.2% market contraction. By February, estimates shifted to 14% price hikes and 8% shipment declines. CCS Insight’s June 2026 report confirmed a 15% annual shipment drop. Budget devices are most affected, as memory and storage costs make up a larger share of their total expenses compared to flagship models.

How Long Will Higher Prices Last?

The memory supercycle is expected to continue through at least 2028, driven by sustained AI infrastructure demand. CCS Insight has not specified when consumer memory prices will return to pre-2026 levels, but analysts suggest relief is unlikely in the near term. The trend also impacts PCs and other devices reliant on DRAM and NAND, with similar price pressures anticipated for laptops and desktops through 2027.

What Should Buyers Do in 2026?

Consumers are advised to purchase smartphones earlier in the year to avoid further price increases. Certified refurbished or pre-owned devices are gaining popularity as alternatives. Holding onto existing devices longer aligns with extended replacement cycles, while mid-range or older flagship models may offer better value than new budget phones. “The full effects of the memory chip crisis are still unfolding,” Hatton said. “Prices are expected to rise throughout the year.”