A surge in demand for computers and data centers to support artificial intelligence is driving a shortage of RAM that IDC says will push global smartphone shipments down 12.9 percent this year, marking the steepest annual decline in more than a decade. The research firm said shipments are expected to fall from 1.26 billion devices in 2025 to 1.12 billion this year, while average selling prices rise sharply.
Memory Shortage And Market Reset
IDC said the shortage of memory components is increasing costs across the supply chain and reshaping the smartphone market. Nabila Popal, senior research director for IDC’s Worldwide Quarterly Mobile Phone Tracker, said the memory crisis represents a structural reset that will alter the long term total addressable market, vendor landscape, and product mix.
Popal said the average retail price of a smartphone is projected to rise 14 percent to a record $523 this year. She said smaller players are likely to exit the market as consolidation accelerates and low end vendors face sharp shipment declines because of supply constraints and reduced demand at higher price points.
Impact On Low Cost Devices And Regions
IDC said rising component costs could make sub $100 smartphones permanently uneconomical, affecting manufacturers that rely on entry level devices. Popal said markets focused on entry and mid tier segments are likely to contract significantly.
The firm expects shipments in the Middle East and Africa to decline by more than 20 percent year over year. China is forecast to see a drop of 10.5 percent, while the broader Asia Pacific region excluding Japan is projected to decline by 13.1 percent.
Industry Outlook And Comparisons
IDC said RAM prices are expected to stabilise by mid 2027. Another analyst firm, Counterpoint, had previously forecast a decline in smartphone shipments but projected a smaller drop of 2.6 percent.
Earlier this year, Nothing co founder and chief executive Carl Pei said rising memory costs would increase smartphone prices in 2026. He said brands face a choice between raising prices by as much as 30 percent in some cases or reducing specifications, adding that markets in entry and mid tier segments could shrink by 20 percent or more as a result.
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