Memory Price Crisis: Greatest Ever Threat to Smartphone Affordability

The push for more affordable smartphones is facing a significant challenge because of the skyrocketing price of memory, driven by the growing demand from AI.
These price rises are fundamentally impacting the BoM for smartphone OEMs. For a low-end smartphone, memory now accounts for 54% of the total BoM, up from just 20% in Q3 2025.
Since this increased BoM significantly impacts the margin of a device, the final retail prices are also increasing. Global smartphone retail ASPs have increased by 20% so far in 2026.
Device price increases are disproportionately impacting consumers in more price-conscious markets, especially those in emerging regions where reliance on lower-end devices is greater, and where smartphone adoption is already a significant challenge.
Taxation reforms, device financing and expansion of the pre-owned smartphone ecosystem are currently the best ways to mitigate the impact across emerging markets.
But these aren’t solutions. They are just strategies to ease the upward pressure of increasing device costs. More needs to be done to protect and improve the availability of low-cost entry-level devices for first-time buyers to avoid further entrenching digital divides.

The push for more affordable smartphones is facing a significant challenge because of the soaring prices of memory. Memory is essential in smartphones in two forms:

DRAM (Dynamic Random Access Memory) is short-term storage that temporarily holds active apps, system processes and data, and dictates how seamlessly a device can multitask and switch between apps. Older DRAM is LPDDR4 (Low-Power Double Data Rate 4), while the newest and most in demand by both smartphones and data centres is LPDDR5x. Most smartphones have between 2 GB and 16 GB of DRAM.
NAND is long-term storage for data, photos, apps and anything else. NAND can be either UFS (Universal Flash Storage) 4.0, which is the modern standard for mobile memory, or UFS 4.1, which is high-speed memory designed for flagship smartphones and AI-driven applications. This is typically between 256 GB and 1 TB.

Prices are skyrocketing due to the increasing demand for high-performance memory, including DDR5 memory that is used in flagship smartphones, to power AI operations and data centres, coupled with a shift in manufacturing away from older memory platforms, such as DDR4, which is still used in entry-level handsets. Having already more than doubled between Q3 2025 and Q1 2026, memory prices jumped a further 80%-90% in Q2 2026, and 15%-30% in Q3 2026. We expect prices to continue to rise, albeit at a slower pace, through to Q1 2027, with stability finally returning by the middle of 2027.

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Jan Stryjak

Jan is an Associate Director with Counterpoint Research, based in London, and leads the company’s European and Sustainability research. He is a seasoned analyst with over 17 years’ experience in the TMT sector, previously with GSMA Intelligence where he led a team of analysts producing highly impactful regional insights. Before that, Jan held strategy and analyst positions at Vodafone UK and Qualcomm respectively, and started his career with research firm TNS (now Kantar).

The push for more affordable smartphones is facing a significant challenge because of the skyrocketing price of memory, driven by the growing demand from AI.
These price rises are fundamentally impacting the BoM for smartphone OEMs. For a low-end smartphone, memory now accounts for 54% of the total BoM, up from just 20% in Q3 2025.
Since this increased BoM significantly impacts the margin of a device, the final retail prices are also increasing. Global smartphone retail ASPs have increased by 20% so far in 2026.
Device price increases are disproportionately impacting consumers in more price-conscious markets, especially those in emerging regions where reliance on lower-end devices is greater, and where smartphone adoption is already a significant challenge.
Taxation reforms, device financing and expansion of the pre-owned smartphone ecosystem are currently the best ways to mitigate the impact across emerging markets.
But these aren’t solutions. They are just strategies to ease the upward pressure of increasing device costs. More needs to be done to protect and improve the availability of low-cost entry-level devices for first-time buyers to avoid further entrenching digital divides.

The push for more affordable smartphones is facing a significant challenge because of the soaring prices of memory. Memory is essential in smartphones in two forms:

DRAM (Dynamic Random Access Memory) is short-term storage that temporarily holds active apps, system processes and data, and dictates how seamlessly a device can multitask and switch between apps. Older DRAM is LPDDR4 (Low-Power Double Data Rate 4), while the newest and most in demand by both smartphones and data centres is LPDDR5x. Most smartphones have between 2 GB and 16 GB of DRAM.
NAND is long-term storage for data, photos, apps and anything else. NAND can be either UFS (Universal Flash Storage) 4.0, which is the modern standard for mobile memory, or UFS 4.1, which is high-speed memory designed for flagship smartphones and AI-driven applications. This is typically between 256 GB and 1 TB.

Memory Price Crisis: Greatest Ever Threat to Smartphone Affordability

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