Do You Know AI Just Added $100 to the Price of Every Smartphone in 2026?

Quick answer: Yes. The average price of a new smartphone hit a record $550 in 2026, about $100 higher than in 2025, and the main driver is not inflation or new camera hardware. It is artificial intelligence. AI data centers are consuming so much DRAM, NAND flash, and HBM memory that phone makers are paying sharply more for the same chips they used last year, and global smartphone shipments are on pace for their steepest annual decline in history as a result.

Key Findings

• Worldwide smartphone shipments are forecast to fall 13.9% year over year in 2026, to about 1.09 billion units, the smallest annual total since 2013, according to IDC.
• The average selling price of a smartphone reached $550 in 2026, up roughly $100 from 2025.
• DRAM contract prices rose another 13 to 18% quarter over quarter in the third quarter of 2026, and NAND flash rose 10 to 15%, on top of jumps of roughly 60% in the second quarter.
• Memory chips now make up 15 to 20% of the total parts cost of a mid range phone and 10 to 15% of a flagship, so even a modest chip price jump reaches the price tag directly.
• Samsung and SK Hynix, two of the world’s largest memory makers, have both said AI driven memory shortages could last into 2027 and beyond.

The Number Behind the Headline: A Record $550 Phone

Smartphone research firm IDC tracks the average selling price, or ASP, of every phone sold worldwide each quarter. For 2026, IDC’s analysts, including Francisco Jeronimo, Bryan Ma, Ryan Reith, and Jeff Janukowicz, forecast that ASP will climb to $550, a roughly $100 increase over 2025. That is one of the largest single year jumps IDC has recorded, and it is happening at the same time shipments are falling, not rising, which is unusual. Normally prices and volumes move in the same direction. In 2026 they moved in opposite directions, and IDC’s own reporting names the memory shortage as the dominant cause, alongside secondary cost pressure from the US Iran conflict on oil and shipping costs.

Why a Chatbot Is Making Your Phone Cost More

The connection between AI and phone prices runs through a component most buyers never think about: memory. Training and running large AI models requires enormous amounts of DRAM and a specialized high bandwidth memory called HBM, which sits directly next to AI processors in data centers. As AI companies and cloud providers built out more data centers through 2025 and 2026, they signed long term supply contracts for memory chips, in some cases reserving output years in advance.

Memory manufacturers such as Samsung, SK Hynix, and Micron make DRAM and NAND for both AI servers and ordinary consumer devices on the same production lines. Server memory carries higher profit margins, so when supply is tight, manufacturers shift capacity toward AI customers first. Tom’s Hardware reported that Samsung and SK Hynix have both warned customers that AI driven memory shortages could extend into 2027 and beyond, with some buyers already locking in HBM supply agreements for future years. That leaves less capacity for the RAM and storage chips that go into phones, laptops, and PCs, and less supply pushes up the price of what remains.

NexploreInfo’s Compiled Data: Memory Prices vs. Phone Prices in 2026

This table is compiled by NexploreInfo from IDC’s 2026 smartphone forecasts and Tom’s Hardware’s memory market coverage, cited in full in the Sources section below. As of late September 2026, these are the most current published figures for both markets.

Which Regions Are Feeling It Most

The shipment decline is not even across the world. IDC’s regional breakdown shows the Middle East and Africa absorbing the steepest drop, with North America the most resilient region.

The regions hit hardest tend to be the ones where budget phones under $100 make up a larger share of sales. IDC notes that this sub-$100 tier, which accounted for more than 170 million units in 2025 alone, is now under real pressure, since a $20 to $30 jump in chip costs is a much bigger percentage hit on a cheap phone than on a flagship.

Who Is Actually Gaining Ground

Not every phone maker is losing out. IDC’s forecast shows Apple’s iOS improving from an earlier projected 8.1% decline to a smaller 5.2% decline, putting Apple on track for roughly 22% global market share, its highest ever. Huawei’s HarmonyOS forecast was revised upward to about 62 million units, from an earlier 42 million estimate. Samsung is also expected to gain share even as Android’s overall shipments fall around 21%. One category is growing outright despite the downturn: foldable phones, up about 20% year over year, with Apple reportedly planning to enter that segment for the first time in 2026.

Current Fact vs. Forecast: What We Actually Know

To be clear about what is confirmed and what is still projection: the memory price increases already recorded in the second and third quarters of 2026 are historical data, not estimates, reported directly by market trackers. IDC’s 13.9% shipment decline figure and the $550 ASP figure are forecasts for the full 2026 calendar year, built from data collected through the third quarter, and IDC has already revised its own forecast once this year, from an earlier 12.9% decline estimate to the current 13.9%. IDC’s outlook for 2027, a much smaller 1.1% decline, and 2028, a 5.5% rebound, are longer range projections and should be read as informed estimates rather than settled numbers. Samsung and SK Hynix’s statement that shortages could last into 2027 and beyond is also a forward looking warning from the companies themselves, not a confirmed multi year fact.

What This Means If You’re Buying a Phone in 2026

For everyday buyers, the practical takeaway is that the cheapest tier of smartphones, historically the fastest growing part of the market in developing regions, is shrinking first, and that mid range phones may see chip related price increases before flagships do, since memory makes up a larger share of their total cost. If your current phone is a budget or mid range model bought in the last two years, the era of steadily falling entry prices for that category has, at least temporarily, paused. There is no confirmed date for when memory supply will loosen; that will depend on how much new fabrication capacity chipmakers bring online for AI customers versus consumer electronics.

Frequently Asked Questions

Is AI really the main reason phone prices are rising in 2026?
It is the primary factor identified by IDC and multiple memory market trackers, working alongside secondary cost pressure from the US Iran conflict’s effect on oil and shipping. The chip shortage itself is driven mainly by AI data center demand for DRAM, NAND, and HBM memory.

Will smartphone prices keep rising after 2026?
That is uncertain. Samsung and SK Hynix have warned shortages could extend into 2027 and beyond, but IDC’s own longer range forecast currently shows shipments stabilizing in 2027 and rebounding by 2028. Both should be treated as forecasts, not guarantees.

Which smartphones are most affected by rising memory prices?
Budget phones under $100 and mid range devices are more exposed, because memory makes up a larger percentage of their total component cost than it does for premium flagships.

Are any phone makers or categories growing despite the decline?
Yes. Apple’s iOS market share, HarmonyOS shipments, and foldable phones as a category are all forecast to grow in 2026 even as the overall market shrinks.

Sources

• IDC, “Worldwide Smartphone Market to Decline 13.9% in 2026 as Memory Crisis and US-Iran War Constrain Growth”
• IDC, “Global Memory Shortage Crisis: Market Analysis and the Potential Impact on the Smartphone and PC Markets in 2026”
• Tom’s Hardware, “Memory price surge begins to cool as consumers hit affordability limit, AI demand still keeps DRAM and NAND prices climbing through Q3 2026”
• Tom’s Hardware, “Samsung and SK Hynix warn AI-driven memory shortages could last until 2027 and beyond”

Figures in this article are current as of September 25, 2026, and are drawn from the IDC and Tom’s Hardware reports linked above. Memory pricing and smartphone shipment forecasts can change quarter to quarter as new data is published.