If you’re planning to buy a phone next year, start saving now. According to research firm IDC, the ongoing shortage of memory means you could end up paying $70 more for a new smartphone.
The memory shortage has already sent DDR5 RAM prices through the roof. But on Tuesday, IDC warned that “ongoing global memory shortages are expected to constrain supply and drive up prices”.
IDC analyst Anthony Scarcella tells us that the global average selling price (ASP) for phones reached 40,440 in Q3. “Next quarter we project they’ll reach 1,511,” he says, as tech giants ramp up GPUs for their AI data centers.
For the full year in 2026, IDC projects ASP will reach 465, up from 7,457 for 2025. Smartphone vendors may try to offset the increase in memory costs by trimming costs elsewhere. “The list of ingredients that can be lowered is extensive. Vendors will need to choose to lower or raise prices to keep costs down,” says Scarcella.
Another possible outcome is a shift towards higher-end devices, which offer better margins and can absorb the financial hit from skyrocketing memory prices. As a result, IDC expects the memory shortage to “more significantly affect low- to midrange Android devices as they remain price-sensitive.”
On the bright side, Scarcella notes that the U.S. market is already skewed toward premium phones, particularly iPhones, giving vendors “more room in the margin” to weather the spike. That said, many high-end phones now include AI-powered features, which require more memory.
High pricing is bound to hurt global demand, with smartphone shipments expected to decline by 0.9 percent in 2026. But on the flip side, if higher prices become a reality, IDC says the smartphone market could reach a “record high of $579 billion” in value.
Recommended by our editors
“Next year will be a challenging time for the industry, however, IDC still believes the market could see record ASPs,” adds Scarcella.
IDC’s predictions echo earlier warnings from Counterpoint Research, which also flagged phone price hikes due to memory shortages. “We’re talking about a big increase in the smartphone bill of materials here—upwards of 15 percent in the case of some models—in the case of key mid-to-high-end segments, eating into margins or impacting growth. It’s probably going to be both,” Counterpoint analyst Evan Lam said at the time.
AI demand shows no signs of letting up, so there’s growing concern that the memory shortage will persist for years and hit all kinds of electronics, including SSDs, graphics cards, PCs and even cars.
Get our best stories!
A smarter, bolder take on the world
By clicking Sign Up, you confirm that you are 16+ years of age and agree to our Terms of Use and Privacy Policy.
Thanks for signing up!
Your membership has been confirmed. Watch your inbox!
About our expert
Michael Kahn
Senior reporter
Experience
I have been a journalist for over 15 years. I got my start as a schools and cities reporter in Kansas City and joined PCMag in 2017, where I cover satellite Internet services, cybersecurity, PC hardware and more. I am currently based in San Francisco, but previously spent over five years in China, covering the country’s technology sector.
Since 2020, I’ve covered the launch and explosive growth of SpaceX’s StarLink satellite Internet service, writing 600+ stories on availability and feature launches, but also regulatory battles over expanding satellite constellations, battles with rival providers like AST SpaceMobile and Amazon, and efforts to expand satellite-based mobile service. I’ve combed through FCC filings for the latest news and reached out to remote corners of California to test StarLink’s cellular service.
I also cover cyber threats, from ransomware gangs to the emergence of AI-based malware. Earlier this year, the FTC forced Avast to pay $16.5 million for secretly harvesting and selling its personal information to third-party clients, as revealed in my joint Investigation Along with the motherboard
I also cover the PC graphics card market. Pandemic-era shortages led me to camp out in front of a Best Buy to get an RTX 3000. Now I’m following how President Trump’s tariffs will affect the industry. I’m always eager to learn more, so please jump into the comments with feedback and send me pointers.
Read full bio
