The Apple Store logo is seen reflected on the glass exterior of Samsung’s flagship store in Shanghai, China, on Monday, October 20, 2025.
Wang Gang | Featured China | Future Publishing | Getty Images
Counterpoint Research said in a note on Tuesday that artificial intelligence players will likely accelerate memory chip shortages, leading to higher smartphone prices and lower shipments in 2026.
According to Counterpoint, smartphone shipments could decline by 2.1% in 2026, compared to the previous forecast of flat to positive growth.
Although shipments are not equivalent to sales, they are a measure of demand because they track the number of devices sent to sales channels such as stores.
Meanwhile, according to Counterpoint, the average selling price of smartphones could rise by 6.9% year-on-year in 2026, compared to previous expectations of a 3.6% rise.
This is being driven by certain chip shortages and bottlenecks in the semiconductor supply chain, which are driving up component prices.
As data centers continue to expand around the world, demand for the systems developed by the company is increasing. Nvidiait uses components designed by SK Hynix and Samsung, the two largest suppliers of so-called memory chips.
However, a specific component used in AI data centers called dynamic random access memory (DRAM) is also important for smartphones. DRAM prices have soared this year as demand exceeds supply.
According to Counterpoint, bill of materials costs for low-end smartphones priced under $200 have increased by 20% to 30% since the beginning of the year. The bill of materials is the manufacturing cost of one smartphone.
In the mid-range and high-end smartphone segment, material costs rose by 10-15%.
“Memory prices could rise another 40% by Q2 2026, resulting in BoM costs that could increase by 8% to more than 15% above current high levels,” Counterpoint said.
Increases in component prices may be passed on to consumers, which will encourage average selling prices to rise.
”apple “Samsung and Samsung are in the best position to weather the next few quarters,” MS Hwang, research director at Counterpoint, said in a note. “However, it will be tough for other companies with less leeway to manage market share and margins.”
Fan said this “will particularly impact” Chinese smartphone makers at the mid-to-low end of the market.
In addition to reusing old components, some companies may downgrade components such as camera modules, displays, and even audio, according to Counterpoint. Smartphone players are likely to try to encourage consumers to buy their more expensive devices as well.
