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IDC explains why $100 smartphones are disappearing.
IDC has revised its global smartphone market forecast and now expects shipments to fall by 12.9% in 2026 due to an unprecedented memory chip shortage, Bloomberg reports . Analysts are calling the situation a crisis like no other: demand for advanced memory for AI applications has stretched global inventories so thin that the shortage will extend well into 2027, threatening the economics of many smartphone manufacturers.
According to IDC estimates, the market will reach approximately 1.1 billion shipments in 2026, up from 1.26 billion the previous year, erasing several years of gradual recovery. Manufacturers are already adjusting to expensive components: they are cutting specifications, eliminating unprofitable entry-level models from their product lines, and actively pushing buyers toward more expensive devices. IDC Senior Research Director Nabila Popal emphasizes that the scale of the current shortage appears more serious than previous shocks such as tariffs and pandemic disruptions, and the end of the crisis will reshape the market in terms of size, average prices, and competitive landscape.
The hardest hit are low-cost Android smartphones, where memory accounts for a significant portion of the cost and margins are already thin. IDC specifically cites rising prices for both DRAM, which is responsible for data storage, and NAND, which is used for storage. In this configuration, devices in the lower price segment are particularly vulnerable, while brands are forced to either raise prices or discontinue some models. Analysts are outright saying that low-cost smartphones are becoming a thing of the past: last year, approximately 170 million devices under $100 entered the market, but IDC considers this segment economically unviable under the new conditions.
The chip suppliers' positions confirm the availability issue. Following the company's earnings report, Qualcomm CEO Cristiano Amon stated that the key issue rests not only on the price of memory but also on the availability of chips, with memory availability determining the overall size of the smartphone market. Premium models will weather the shortage more easily, so the main impact on volume and product range will fall on the mass market, where any increase in component prices immediately disrupts the usual math.
IDC has revised its global smartphone market forecast and now expects shipments to fall by 12.9% in 2026 due to an unprecedented memory chip shortage, Bloomberg reports . Analysts are calling the situation a crisis like no other: demand for advanced memory for AI applications has stretched global inventories so thin that the shortage will extend well into 2027, threatening the economics of many smartphone manufacturers.
According to IDC estimates, the market will reach approximately 1.1 billion shipments in 2026, up from 1.26 billion the previous year, erasing several years of gradual recovery. Manufacturers are already adjusting to expensive components: they are cutting specifications, eliminating unprofitable entry-level models from their product lines, and actively pushing buyers toward more expensive devices. IDC Senior Research Director Nabila Popal emphasizes that the scale of the current shortage appears more serious than previous shocks such as tariffs and pandemic disruptions, and the end of the crisis will reshape the market in terms of size, average prices, and competitive landscape.
The hardest hit are low-cost Android smartphones, where memory accounts for a significant portion of the cost and margins are already thin. IDC specifically cites rising prices for both DRAM, which is responsible for data storage, and NAND, which is used for storage. In this configuration, devices in the lower price segment are particularly vulnerable, while brands are forced to either raise prices or discontinue some models. Analysts are outright saying that low-cost smartphones are becoming a thing of the past: last year, approximately 170 million devices under $100 entered the market, but IDC considers this segment economically unviable under the new conditions.
The chip suppliers' positions confirm the availability issue. Following the company's earnings report, Qualcomm CEO Cristiano Amon stated that the key issue rests not only on the price of memory but also on the availability of chips, with memory availability determining the overall size of the smartphone market. Premium models will weather the shortage more easily, so the main impact on volume and product range will fall on the mass market, where any increase in component prices immediately disrupts the usual math.
