Recent industry analyses indicate that while smartphone manufacturers have been striving to maintain stable prices for Android devices in 2025, this trend is unlikely to continue into 2026. Increasing production costs driven by global demand for memory components are expected to significantly impact the Android market, leading to notable price hikes.
A key factor contributing to this shift is the rising demand for RAM, NAND chips, and other storage components, largely fueled by the rapid growth of AI technology. Data centers operated by companies such as Google, Meta, Amazon, Nvidia, and OpenAI have dramatically increased their consumption of these chips, which has pushed consumer electronics further down the priority list.
With higher profits in the corporate server sector, major suppliers like Samsung, SK Hynix, and Micron are allocating much of their manufacturing capacity to enterprise clients. This shift has directly reduced the availability of components for smartphones, PCs, tablets, and TVs, resulting in cost increases throughout the supply chain.
In recent months, DRAM prices have surged between 70% and 80%, with some instances exceeding 170%, according to reports from Chosun Biz. Although memory typically accounts for only 10% to 15% of a smartphone’s total cost, these price increases significantly impact manufacturers’ budgets.
In 2025, brands managed to avoid passing costs onto consumers by reducing profit margins and making various internal adjustments. However, these measures are no longer sufficient. Next year, companies are likely to attempt cost-cutting by reducing specifications related to displays, batteries, or even charging features. Despite these strategies, limitations will make price increases unavoidable.
The rise of on-device AI, such as models like Google’s Gemini Nano, further elevates hardware requirements, necessitating higher amounts of fast RAM and storage for effective operation. Additionally, extended software support policies (now reaching up to 7 years of updates for some brands) compel manufacturers to utilize more durable and higher-end components.
To complicate matters, SoC prices are adding further pressure; the upcoming Snapdragon 8 Elite Gen 5, set to feature in flagship devices next year, is already 20% more expensive than the current generation, potentially reaching US$190 per chip. Brands are likely to adjust retail prices to offset this increase.
Early signs of this trend are already visible in other markets. For instance, PC makers are contemplating 15% to 20% price adjustments, and even affordable products like the Raspberry Pi have experienced price hikes due to RAM shortages. Game consoles and TVs are expected to follow a similar pattern.
While nominal launch prices for premium smartphone brands may remain stable, experts predict fewer deals and weaker incentives for trade-ins. Mid-range devices, which typically have smaller profit margins, will likely feel the impact first, either through higher prices or slower year-over-year improvements.
Filed in . Read more about AI (Artificial Intelligence), Amazon, Android, Meta, NVIDIA, OpenAI, and Samsung.
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