Despite global economic headwinds, the smartphone market grew by 1.9% in 2025. Apple and Samsung dominated sales, collectively holding 39% of global market share – an increase from 37% in the previous year, according to data from the International Data Corporation (IDC). However, this growth is unlikely to continue into 2026 due to a looming crisis: a severe shortage of RAM, the memory component vital for smartphone functionality.
The Rise of Premium Phones in 2025
The past year saw strong demand for premium smartphones (priced $800+), indicating that consumers with disposable income were relatively unaffected by inflation and supply chain issues. Apple and Samsung capitalized on this trend, securing a larger share of the market. This suggests that brand loyalty and perceived value continue to drive high-end purchases, even in uncertain economic times.
Why the RAM Shortage Matters
The RAM shortage is not just another supply chain hiccup; it’s a potentially devastating disruption. Unlike previous shortages that affected specific components, this crisis impacts a core element of modern smartphones. Without sufficient RAM, production will slow, costs will rise, and consumer choice will shrink. This is particularly concerning because the shortage is already affecting the PC market, indicating its severity and long-term implications.
How Tech Giants Will Adapt
Larger manufacturers like Apple and Samsung will likely navigate the shortage more effectively due to their buying power. They will secure preferential supply rates, ensuring continued production while smaller brands struggle. However, the average consumer will inevitably face higher prices, regardless of brand loyalty.
Analysts predict companies will attempt to mask these increases through various strategies:
- Reducing base model specifications: Lower storage options will become standard, pushing consumers toward more expensive configurations.
- Sticking with older technology: Instead of adopting the latest advancements, manufacturers may opt for cost-effective components from the previous year.
- Accepting lower margins on premium devices: Super-premium phones (like foldables) can absorb some price increases without significantly impacting sales.
The Impact on Budget and Mid-Range Phones
The worst hit will be the budget and mid-range segments, where margins are already thin. These devices, critical for emerging markets and cost-conscious consumers, will see significant price hikes. This could force some consumers to delay upgrades or switch to older, less capable devices, potentially slowing down overall market growth.
“The duration of the memory shortage will ultimately determine the extent of the market contraction,” according to Ryan Reith, IDC group vice president.
The industry is bracing for a decline in 2026 as a result. Companies will likely prioritize profit preservation over consumer affordability, ensuring that even entry-level phones reflect the increased costs.
