Smartphones face a memory cost crunch – and buyers aren't in the mood
(2025/12/16)
- Reference: 1765892722
- News link: https://www.theregister.co.uk/2025/12/16/smartphones_memory_ai/
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AI-nflation The smartphone industry's brief bounce back now looks set to run straight into a wall, with analysts warning that rising memory costs are about to test buyers' patience.
Counterpoint Research has [1]revised down its 2026 smartphone shipment forecast to a 2.1 percent decline, citing a tightening supply of memory chips that is driving up costs and squeezing manufacturers.
Server prices set to jump 15% as memory costs spike [2]READ MORE
The analyst firm says higher DRAM and NAND prices risk undermining confidence across the market, particularly as smartphone vendors struggle to justify higher prices for devices that to many feel marginally different from the ones already in their pockets.
The warning comes just weeks after Counterpoint struck a more upbeat tone on the market's direction. In November, the firm said smartphone shipments were set to continue growing in 2025, extending the recovery that began in 2024 as delayed replacement demand worked its way through the system. Even then, Counterpoint stressed that the improvement owed more to deferred upgrades than to any surge of consumer enthusiasm.
Now the cracks are showing. Replacement cycles have [3]stretched beyond 40 months on average , with users holding onto phones for much longer than manufacturers would like. For many, today's devices are already "good enough." Performance improvements are incremental, and software experiences change little from one generation to the next.
[4]
Into that fragile recovery comes a renewed surge in memory prices. Commodity memory costs are climbing as manufacturers prioritize higher-margin AI and datacenter products over traditional consumer silicon, and DRAM and NAND supply has tightened, leaving smartphone makers competing for capacity while hyperscalers and GPU vendors gobble up chips.
[5]
[6]
The pressure may intensify further. Counterpoint says memory prices could rise by a further 40 percent through the second quarter of 2026, pushing smartphone bills of materials between 8 percent and more than 15 percent above today's already elevated levels. What's more, Samsung is reportedly planning to increase some memory prices by as much as 100 percent, [7]according to market watchers , a move that would ripple quickly through the smartphone supply chain.
Those costs feed directly into Counterpoint's downgraded outlook. The firm said the resulting 2.1 percent decline in expected shipments translates into a downward revision of 2.6 percentage points to its forecast, underlining how sharply expectations have shifted. Chinese OEMs are expected to feel the impact most acutely, with brands including HONOR, OPPO, and Vivo seeing the largest cuts relative to previous estimates.
[8]
That's because even budget devices now ship with RAM and storage configurations that were once reserved for flagships, and Counterpoint warns that rising memory costs disproportionately affect entry-level and mid-range models.
[9]Apple's lousy AI didn't stop it beating Samsung's smartphone sales for the first time since 2011
[10]London cops unplug iPhone crime ring said to nick 40% of city's mobiles
[11]Qualcomm in the dock over 'patent tax' on smartphones
[12]European consumers are mostly saying 'non' to trading in their old phones
[13]Doomed UK smartphone maker Bullitt Group finally liquidated
"What we are seeing now is the low end of the market (below $200) being impacted most severely, with BoM (bill of materials) costs increasing by 20-30 percent since the beginning of the year," said Counterpoint Research director MS Hwang. "The market's mid and high-end segments have seen 10-15 percent price increases."
The industry's favorite escape hatch, the so-called "AI phone," has yet to do much heavy lifting. While firms have spent the past year [14]pitching on-device AI as the next significant upgrade driver , most AI phone features so far amount to modest software tricks rather than compelling new capabilities and have not meaningfully changed buying behaviour.
Consumers appear to be responding in more practical ways. Demand for refurbished and secondhand smartphones [15]continues to rise as shoppers opt for cheaper, slightly older devices rather than paying top dollar for incremental updates.
If memory costs push new phone prices higher again, that fallback option only becomes more appealing. ®
Get our [16]Tech Resources
[1] https://counterpointresearch.com/en/insights/2026-smartphone-shipment-forecasts-revised-down-as-memory-shortage-drives-bom-costs-up
[2] https://www.theregister.com/2025/12/04/server_prices_15_percent_jump_memory_costs/
[3] https://www.theregister.com/2024/01/23/second_hand_device_market/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aUGQKygTh0tCvRuoCOHQRAAAAE4&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aUGQKygTh0tCvRuoCOHQRAAAAE4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aUGQKygTh0tCvRuoCOHQRAAAAE4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://x.com/jukan05/status/2000418030627729562
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aUGQKygTh0tCvRuoCOHQRAAAAE4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2025/11/27/counterpoint_smartphone_market_predictions/
[10] https://www.theregister.com/2025/10/07/london_phone_ring_bust/
[11] https://www.theregister.com/2025/10/06/which_says_qualcomm_owes_uk/
[12] https://www.theregister.com/2025/06/18/used_phones_europe/
[13] https://www.theregister.com/2025/06/17/doomed_uk_smartphone_maker_bullitt/
[14] https://www.theregister.com/2025/09/09/gartner_ai_phone/
[15] https://www.theregister.com/2024/01/23/second_hand_device_market/
[16] https://whitepapers.theregister.com/
Counterpoint Research has [1]revised down its 2026 smartphone shipment forecast to a 2.1 percent decline, citing a tightening supply of memory chips that is driving up costs and squeezing manufacturers.
Server prices set to jump 15% as memory costs spike [2]READ MORE
The analyst firm says higher DRAM and NAND prices risk undermining confidence across the market, particularly as smartphone vendors struggle to justify higher prices for devices that to many feel marginally different from the ones already in their pockets.
The warning comes just weeks after Counterpoint struck a more upbeat tone on the market's direction. In November, the firm said smartphone shipments were set to continue growing in 2025, extending the recovery that began in 2024 as delayed replacement demand worked its way through the system. Even then, Counterpoint stressed that the improvement owed more to deferred upgrades than to any surge of consumer enthusiasm.
Now the cracks are showing. Replacement cycles have [3]stretched beyond 40 months on average , with users holding onto phones for much longer than manufacturers would like. For many, today's devices are already "good enough." Performance improvements are incremental, and software experiences change little from one generation to the next.
[4]
Into that fragile recovery comes a renewed surge in memory prices. Commodity memory costs are climbing as manufacturers prioritize higher-margin AI and datacenter products over traditional consumer silicon, and DRAM and NAND supply has tightened, leaving smartphone makers competing for capacity while hyperscalers and GPU vendors gobble up chips.
[5]
[6]
The pressure may intensify further. Counterpoint says memory prices could rise by a further 40 percent through the second quarter of 2026, pushing smartphone bills of materials between 8 percent and more than 15 percent above today's already elevated levels. What's more, Samsung is reportedly planning to increase some memory prices by as much as 100 percent, [7]according to market watchers , a move that would ripple quickly through the smartphone supply chain.
Those costs feed directly into Counterpoint's downgraded outlook. The firm said the resulting 2.1 percent decline in expected shipments translates into a downward revision of 2.6 percentage points to its forecast, underlining how sharply expectations have shifted. Chinese OEMs are expected to feel the impact most acutely, with brands including HONOR, OPPO, and Vivo seeing the largest cuts relative to previous estimates.
[8]
That's because even budget devices now ship with RAM and storage configurations that were once reserved for flagships, and Counterpoint warns that rising memory costs disproportionately affect entry-level and mid-range models.
[9]Apple's lousy AI didn't stop it beating Samsung's smartphone sales for the first time since 2011
[10]London cops unplug iPhone crime ring said to nick 40% of city's mobiles
[11]Qualcomm in the dock over 'patent tax' on smartphones
[12]European consumers are mostly saying 'non' to trading in their old phones
[13]Doomed UK smartphone maker Bullitt Group finally liquidated
"What we are seeing now is the low end of the market (below $200) being impacted most severely, with BoM (bill of materials) costs increasing by 20-30 percent since the beginning of the year," said Counterpoint Research director MS Hwang. "The market's mid and high-end segments have seen 10-15 percent price increases."
The industry's favorite escape hatch, the so-called "AI phone," has yet to do much heavy lifting. While firms have spent the past year [14]pitching on-device AI as the next significant upgrade driver , most AI phone features so far amount to modest software tricks rather than compelling new capabilities and have not meaningfully changed buying behaviour.
Consumers appear to be responding in more practical ways. Demand for refurbished and secondhand smartphones [15]continues to rise as shoppers opt for cheaper, slightly older devices rather than paying top dollar for incremental updates.
If memory costs push new phone prices higher again, that fallback option only becomes more appealing. ®
Get our [16]Tech Resources
[1] https://counterpointresearch.com/en/insights/2026-smartphone-shipment-forecasts-revised-down-as-memory-shortage-drives-bom-costs-up
[2] https://www.theregister.com/2025/12/04/server_prices_15_percent_jump_memory_costs/
[3] https://www.theregister.com/2024/01/23/second_hand_device_market/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aUGQKygTh0tCvRuoCOHQRAAAAE4&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aUGQKygTh0tCvRuoCOHQRAAAAE4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aUGQKygTh0tCvRuoCOHQRAAAAE4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://x.com/jukan05/status/2000418030627729562
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aUGQKygTh0tCvRuoCOHQRAAAAE4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2025/11/27/counterpoint_smartphone_market_predictions/
[10] https://www.theregister.com/2025/10/07/london_phone_ring_bust/
[11] https://www.theregister.com/2025/10/06/which_says_qualcomm_owes_uk/
[12] https://www.theregister.com/2025/06/18/used_phones_europe/
[13] https://www.theregister.com/2025/06/17/doomed_uk_smartphone_maker_bullitt/
[14] https://www.theregister.com/2025/09/09/gartner_ai_phone/
[15] https://www.theregister.com/2024/01/23/second_hand_device_market/
[16] https://whitepapers.theregister.com/
There's already heavy discounts in 2025
Adrian The Alchemist
Got 2 Galaxy S25 Ultras over the Summer for more than half price off and 2 free 10 inch tablets
So with that level of discounts Samsung must be feeling the pinch already let alone with rising component prices
Oh well hoping the Steam machine isn't too badly affected with memory prices next year
Re: There's already heavy discounts in 2025
iron
Which would not have been affected by memory prices rising in the last two or three months since they were built earlier in the year.
DRAM prices have more than doubled. The Steam Machine is going to be affected.
AI is a catastrophe...
Bloodbeastterror
...happening right in front of us, the few advantages far outweighed by the negatives and the outright danger that it poses. As with fossil fuels, the dangers are already known, and yet we continue to walk blindly towards the black hole...
Amazing
The scrooge of christmas(AI) seems to be showing up everywhere. From energy prices to pc's to now phones. All for a thing few want except for maybe the venture capitalists and for a thing that is massively unprofitable. And I mean massively on a scale never seen before. When this train wreck happens, expect a mess.