The AI boom is making the cheapest smartphones disappear
4 hours ago
- Global smartphone prices have risen about 15% for existing models and 25% for new launches, driven by a memory chip shortage caused by AI data center demand.
- Chinese smartphone makers, which dominate global shipments, have drastically reduced entry-level projects and shifted focus to more profitable premium devices.
- Price increases vary sharply by region: 21% in India, 19% in Asia-Pacific, 18% in Middle East and Africa, and only 5% in the U.S.
- The rising cost of affordable phones could widen the digital divide, making it harder for first-time buyers and low-income users to access the internet.
- The market for smartphones under $150 is shrinking; shipments of sub-$100 phones fell nearly 60% year-over-year in Q2 2026.
- Memory chip manufacturers (Samsung, SK Hynix, Micron) have pivoted supply to AI centers, causing scarcity and price hikes passed to consumers.
- For the poorest consumers, entry-level smartphones can cost up to 76% of monthly income in sub-Saharan Africa, forcing them to go offline or make sacrifices.