Global smartphone shipments under $400 are expected to plummet 22% year-over-year in 2026 as rising DRAM and NAND memory costs squeeze margins, according to research firm Omdia.
Memory chip expenses have become the dominant cost factor in budget smartphones, accounting for approximately 60% of total materials costs in Q1. The sharp increase in DRAM and NAND pricing is forcing manufacturers to either absorb losses or shift production away from the sub-$400 segment.
The $400 price bracket represents a critical market tier, particularly in emerging economies where affordability drives adoption. A 22% shipment decline would mark a significant contraction in a category that has historically sustained smartphone market growth.
Omdia attributes the memory cost surge to supply constraints and increased demand across industries. As chipmakers prioritize higher-margin applications, budget phone manufacturers face pressure to relocate production or accept reduced unit volumes.
The forecast suggests 2026 will be a pivotal year for the smartphone industry's entry-level segment, with potential implications for market concentration and consumer purchasing patterns in price-sensitive regions.
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