Memory Chip Price Hikes Squeeze Low-End Phone Market as Samsung and Apple Gain Market Share
nashnova research
Rising memory-chip prices pushed global smartphone shipments down 20% year-on-year in Q3 2026 — the weakest third quarter since 2012 — yet Samsung and Apple expanded share as cost pressure systematically hollowed out the budget segment.
How bad is the shipment drop, and what caused it?
Global smartphone shipments fell 20% year-on-year in Q3 2026, the lowest Q3 since 2012.
The main driver: surging prices for DRAM and NAND flash — the two types of memory chips inside every phone — which pushed up bill-of-materials costs directly.
Component supply tightness further constrained production plans. This means → the slump is not just a demand story; the supply side is actively shrinking too.
Why are phones getting more expensive?
Since early 2026, global smartphone average selling prices have risen roughly 20%.
Brands responded uniformly: narrowing product lines, cutting low-margin models, and funnelling resources into higher-priced segments.
In plain terms = manufacturers are not choosing to abandon cheap phones — they simply lose money on every unit sold. Budget buyers cannot absorb the price hike, and there is almost no room to pass costs through.
How far will the budget segment shrink?
Phones priced below $200 are forecast to drop from 570 million units in 2025 to 340 million by 2030 — a decline of roughly 230 million units, or about 40%.
Phones at $200 and above are expected to rise from 685 million to 861 million units, up about 26%.
This means → the industry's product mix is structurally migrating upmarket. The budget slump is not cyclical — it is a permanent contraction.
Where do the buyers who cannot afford pricier phones go?
Some demand is expected to shift to second-hand and refurbished devices; others will simply hold onto their current phones longer.
First-time-buyer demand in lower-income markets faces mounting pressure — the entry point for a first smartphone is rising.
Even if global shipments recover to roughly 1.2 billion units by 2030, the budget segment will remain well below current levels. In plain terms = the market recovers, but the slice for affordable phones has permanently shrunk.
Who is gaining share and who is losing it?
Samsung shipments fell just 3% year-on-year — far less than the market's 20% decline — lifting its share to 23%.
Apple reached roughly 22% share, breaking above 20% in a third quarter for the first time.
Xiaomi shipments dropped more than 30%, with share falling to 10%. OPPO (including OnePlus and Realme) and vivo each fell over 20%, landing at 9% and 8% respectively. This reflects that Chinese brands, more reliant on budget-segment volume, took the deepest hit from this cost shock.
Why can Samsung absorb the blow — and will memory prices stay elevated?
Samsung runs both a memory-chip business and a smartphone business. Profits from memory price hikes can offset the rising cost of making phones.
This means → the same price surge that is pure cost pressure for phone-only brands is, for Samsung, a case of "what the left hand earns subsidises what the right hand spends."
Whether memory prices stay elevated will determine how deep and how lasting this market reshuffling proves — if memory prices retreat, Samsung's hedge weakens, but cost pressure on every phone maker eases in parallel.
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