According to a new report by Omdia, rising DRAM and NAND prices will put pressure on mid-to-low-end smartphones. It will accelerate the decline of smartphones priced below $400, it is said.
As many of you know, both DRAM and NAND prices have increased by a lot over recent quarters, and the rise is expected to continue. Memory costs have become a burden to smartphone OEMs, and especially mid-to-low-end smartphones.
Rising component prices will affect budget smartphones quite a bit
Omdia says that the rising component prices are contributing to a year-on-year decline of over 22% in the market for smartphones priced below $400. The cost structure of smartphones has undergone a significant shift, it is said.
The memory cost share in Q1 2026 had nearly doubled in the sub-$400 price segment and increased by more than 100% in products above $400. In that same quarter, memory costs accounted for nearly 60% of the total BOM cost in smartphones priced below $400. That percentage rises to 64% in products below $99.
As expected, smartphone OEMs are trying to alleviate some of that pressure by reducing the cost of other components. That includes display panels, sensors, radio frequency (RF) modules, and so on.
The report claims that things are expected to get even worse in the coming quarters. Smartphone prices will go up, and the demand will decline because of it. That especially goes for low-end consumers, as they’re price-sensitive.
According to Omdia’s latest forecast, the global smartphone market will decline by 12% year-over-year in 2026. Smartphone shipments above $400 are expected to remain resilient, however.
The Android Headlines Take
This was all to be expected following rising DRAM and NAND prices. The price tags did not go up by a little bit, not at all. The prices have been running rampant for a while now, and things will only get worse. That had to affect smartphone prices and how OEMs approach the problem.
Omdia’s report is not surprising at all. Consumers who buy budget phones are very price sensitive, so a decrease in demand is expected. It remains to be seen how long will this take, but some reports claim that the same is waiting for us in 2027.
The post Budget Smartphones Are in Crisis — and a New Report Explains Exactly Why appeared first on Android Headlines.
