The current memory shortage is the result of unprecedented AI infrastructure demand and memory manufacturers’ strategic pivot toward more profitable products, particularly DDR5 and High Bandwidth Memory (HBM). Although smartphones use LPDDR, not DDR5 or HBM, this kind of memory competes for the same wafer. In addition to the decline in DDR4 production, manufacturers are also shrinking the LPDDR output, resulting in supply tightness and price increases.

In 2025, entry-level and mid-range smartphones priced below $250 accounted for 64% of Mexico’s total smartphone sales. This segment has long driven market volume, and its memory trends reflect shifting consumer expectations, OS requirements, and OEM cost structures. In 2025, the most popular memory configuration was 8GB of RAM plus 256GB of storage, accounting for 37% of the total market in Mexico, a shift from earlier years, when the 4GB/128GB combination was the most popular. In 2026, the 8GB/256GB setup is expected to be the best-selling configuration, due to the balance between affordability and the variety of portfolios available on the market.

Best-selling Smartphone Memory Configurations in Mexico, 2020 - 2025

In 2026, memory used in sub-$250 price band smartphones is expected to face the sharpest price increases and the most pronounced supply tightening, as this memory tier delivers lower revenue and thinner margins for component manufacturers. The impact will be more noticeable during the second quarter, when OEMs, retailers, and distribution channels will revise their pricing, aiming to implement the adjustments ahead of the second half of the year.

The memory shortage is expected to drive several shifts in the Mexican smartphone market, such as:

1.     OEM Perspective:

• Increased Manufacturer’s Suggested Retail Price (MSRP): OEMs will have to increase prices due to higher BOM costs.
• Memory shortage resilience: Samsung and Apple are expected to be the least hurt by the memory shortage.
• Hardest hit by memory shortage: Brands such as Xiaomi, vivo, OPPO, Motorola, and HONOR may struggle for memory inventory, while the biggest risk to ensure memory availability will be faced by Transsion, realme, small brands, and local kings.
• Reduced stock and SKUs in the entry-level models: With limited memory supply, OEMs may reduce both model variety and volumes in the entry-level segment, prioritizing portfolios that maximize revenue and profitability.
• Optimize price by reducing other specs: To mitigate rising memory costs, OEMs may lower specifications and vary components to keep ASPs competitive.

2.     Retailers and Distribution Channels perspective:

• Higher prices in entry-level and mid-range devices: With increasing Manufacturer’s Suggested Retail Prices, retailers will need to adjust prices accordingly to maintain margin levels, pushing price increases to the consumer.
• Installment plans: This is a core purchasing mechanism shaping smartphone sales dynamics in Mexico. To maintain sales volume, retailers and distributors may extend installment plan terms or increase monthly payment amounts.
• Gray market increase: Device price is a key driver of consumer purchase decisions. Due to its lower pricing, the gray market is likely to gain market share participation.
• Promotions: Both Retailers and OEMs will work together to minimize price increases, implement promotions for strategic products, reduce margins, offer bundles, and implement attractive data plans in partnership with carriers.
• Short-term forecast: Given the current environment of price speculation, retailers are shifting to a more conservative stance, compressing forecast windows until market dynamics stabilize.

3.     Customer perspective:

• Refurbish sales increase: The refurbished market in Mexico is expected to grow from 10% YoY to 15% YoY, outpacing the projected growth of the global refurb markets.
• Increase buyer‑acquisition spending: The market saw higher spending per device in 2025, and this trend is set to continue in 2026. However, it will be accompanied by reduced demand, leading to overall market contraction.
• Longer upgrade cycles: With higher spending per device, users tend to keep their devices longer, extending the replacement cycle. This behavior, combined with longer installment plans, will likely lead to a market slowdown.
• Fix damaged devices: To reduce expenses, consumers will evaluate the price benefit of fixing their devices before buying a new phone.

In 2026, OEMs and consumers in Mexico will navigate a preservation-driven environment shaped by economic headwinds. This year marks a breaking point that will accelerate market consolidation. Brands, retailers, and distributors that adapt fastest will not only cushion the impact but also deliver stronger, more resilient value to customers.