The year 2026 has been an absolute carnage for the smartphone industry due to the ongoing RAM crisis, and it's about to get worse. A newly revised forecast from IDC predicts that the industry could face a brutal 16.7% year-over-year decline in 2026, correcting the previous 14% figure.
IDC Says the Market Could Get Even Worse
IDC predicts that the forecast translates to a massive loss of roughly 200 million smartphone units, with the second half of the year expected to bear the brunt of the impact. For consumers, this means even more inflated prices as RAM costs are projected to continue to climb through 2028.
The situation post-2028 is expected to get only marginally better, as average selling prices will only come down by 1-2%. This has effectively destroyed the entry-level market in India. Explaining further, IDC Vice President Francisco Jeronimo states:
The memory tsunami that we warned about is now hitting the market in full, and consumers are starting to pay the AI bill. The components that make AI possible are the same ones in short supply, and their cost is being passed straight through to the shelf. Average selling prices are up 27.6% this year and will keep rising well into 2027. The era of the cheap smartphone has ended. From here, the winners will be the vendors with the scale and supply leverage to hold demand at prices consumers have never had to pay before.
— Francisco Jeronimo, IDC
According to the report, the sub-$100 smartphone segment, which moved 173 million units in 2025, is currently facing an existential crisis. By Q2 2026, this budget category had already suffered a nearly 60% YoY drop.
Premium devices remain resilient in regions like the US and UK due to long-term financing, but emerging markets are taking a massive hit, with a drop of over 20% this year. Besides, manufacturers like Apple and Samsung have so far absorbed the hits from the RAM crisis, helping maintain pricing.
While makers of affordable smartphones could be preparing for their impending doom, there's a silver lining for Apple, Samsung and Huawei. Thanks to their massive scale and pricing, they may be able to survive much better. This is why we think the great smartphone reset is already here.
However, despite the grim outlook for traditional slabs, the foldable market continues to grow. The category is forecasted to grow by 12.6% in 2026 to reach 22.9 million units, before increasing to approximately 27 million units in 2027.
This surge is largely attributed to Apple's highly anticipated entry into the space, which is expected to be announced on September 9, 2026. Gone are the days of value-for-money smartphones with great specs and accessible pricing.
The events unfolding are quite accurate to the RAM crisis we had predicted, and the best move right now is to hold on to your relatively new phone, or quickly buy a new phone if needed right now. The fact that we haven't been able to keep up with the price hikes every day in our smartphone price increase tracker says a lot about the current situation.
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