RAMageddon is causing chaos with smartphone shipments and pricing.
The smartphone industry is facing a potential historic downturn in 2026 due to a RAM shortage fueled by AI giants’ memory demands. According to the latest report from the International Data Corporation (IDC), smartphone shipments are expected to drop by 12.9 percent this year, hitting their lowest annual volume in over a decade.
Meanwhile, smartphone prices are predicted to soar, with a 14 percent increase taking the average selling price up to a record $523. “While memory prices might stabilize by mid-2027, they won’t revert to previous levels,” says IDC senior researcher Nabila Popal, who believes the sub-$100 phone market will become unsustainable. Apple may soon unveil its budget-friendly “iPhone 17e,” potentially hinting at future trends.
The RAM shortage will impact more than just smartphones as major AI firms like Microsoft, Amazon, OpenAI, and Google continue to buy up memory chips for their AI datacenters. Many tech companies, including Raspberry Pi, Framework, and Samsung, are already seeing price increases due to the chip shortage, which could delay the release of products like the PlayStation 6 and Meta’s next headset.
The memory shortage will likely affect budget Android smartphones the hardest, with rising component costs forcing manufacturers to pass these expenses onto consumers. Francisco Jeronimo, vice president for IDC’s Worldwide Client Devices, indicates that this could drive smaller brands out of the market, allowing Apple and Samsung to gain more market share.