The surge in demand for computers and data centers driven by artificial intelligence is leading to a substantial RAM shortage. This shortage has caused memory prices to skyrocket, prompting analysts at IDC to forecast a notable decline in smartphone shipments. They predict a drop of 12.9% this year, marking the most significant decrease in over a decade.
Earlier this year, IDC reported that manufacturers shipped approximately 1.26 billion devices in 2025. However, this figure is expected to fall to about 1.12 billion in the current year.
Nabila Popal, senior research director at IDC's Worldwide Quarterly Mobile Phone Tracker, emphasized that this memory crisis signifies more than just a temporary setback; it represents a fundamental shift in the market, altering the long-term Total Addressable Market (TAM), vendor dynamics, and product offerings.
Popal also stated that the average selling price of smartphones is anticipated to increase by 14% due to the memory shortage. "We foresee a consolidation in the market as smaller players may exit, while low-end manufacturers could experience sharp declines in shipments amid supply limitations and reduced demand for higher-priced models. Although we expect a record drop in shipments, the average selling price is projected to reach a historic $523 this year," she explained.
Regions like the Middle East and Africa are projected to face shipment declines exceeding 20% year-over-year. Other markets, including China and the Asia Pacific (excluding Japan and China), are also expected to see reductions of 10.5% and 13.1%, respectively. IDC anticipates that RAM prices may stabilize by mid-2027.
In a related note, another analyst firm, Counterpoint, had previously predicted a decline in smartphone shipments, estimating a more modest dip of just 2.6%. Carl Pei, co-founder and CEO of Nothing, has also pointed out that rising memory module costs for manufacturers will likely lead to higher smartphone prices in 2026. He remarked, "Brands now face a straightforward choice: raise prices significantly or downgrade specifications. The traditional model of offering more features for less money is becoming unsustainable."
Pei further indicated that entry and mid-tier market segments might shrink by over 20%, posing challenges for brands that have historically dominated these categories.
