‘The tariffs and pandemic crisis seem a joke compared to this’: Cheap phones could be gone forever thanks to the RAM crisis, a new report claims

• The RAM crisis will bring "seismic" changes to phones, a new report says
• That means rising prices and changing specifications
• The changes could be long-lasting and potentially permanent

If you’ve been thinking about upgrading your computer, it’s been hard to avoid news of rapidly rising component prices caused by the ongoing RAM shortage. The impact on all the best phones has been less clear, but a new report has highlighted how it could drastically affect the smartphone world over the coming months.

The report comes from tech analysts IDC (via Bloomberg), and it makes for some pretty bleak reading. According to IDC, the global smartphone market will shrink 12.9% in 2026, sparking a “crisis like no other” in the industry. Indeed, IDC says that past upheaval will pale in comparison, saying that “The tariffs and pandemic crisis seem a joke compared to this.”

The outlook for consumers is pretty miserable. In response to the memory crunch, Bloomberg says that smartphone makers are “reining in specifications, eliminating unprofitable entry-level models and pushing consumers to buy more premium devices.”

And this might not be a temporary change, either. IDC’s Senior Research Director Nabila Popal believes that “The smartphone market will witness a seismic shift by the time this crisis is over – in size, average selling prices and competitive landscape.”

For its part, Bloomberg believes that the current situation will extend into 2027 and that “even when supply is replenished, returning to the old pricing structures now appears unlikely.”

Bad news, especially for Android

The ongoing RAM crisis has been caused by the extreme demands of the artificial intelligence (AI) industry, which has eaten up most of the component supply for its data center needs, and it’s now having a knock-on effect on consumer devices.

As Bloomberg puts it, “The demand for advanced memory to power artificial intelligence tasks has drained global supply until well into next year and now jeopardizes the business model of many smartphone makers.”

The state of the industry is particularly bad news for Android phones, where profit margins tend to be thin and prices are often low. IDC noted that entry-level devices could be particularly badly affected, as memory makes up a larger share of manufacturers’ costs at this end of the market. Companies like Lenovo and Xiaomi have already warned that prices might have to rise.

Premium companies like Apple might weather the storm a little better, as their higher profit margins might allow them to absorb more of the cost increases instead of passing them on to consumers. That said, Apple CEO Tim Cook recently conceded that the supply shortage could have a “bit more of an impact” going forward than it did last year, raising the question of whether the company will have to raise prices.

IDC is not the only research firm to hold this pessimistic outlook. For instance, analysts at Counterpoint recently claimed that “2026 is shaping up to be the worst year in smartphone history” due to a “full-scale supply shock” triggered by the RAM shortage.

IDC’s Popal sounded a gloomy note by adding: “The days of cheap smartphones are gone, as even when the crisis is over, we don’t expect memory prices to go back down to 2025 levels.” According to Bloomberg, some 170 million phones costing under $100 were sold in 2025 – an entire segment that now looks “uneconomical to maintain.”

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