The Smartphone Recession: The Cause Was "AI's Voracious Appetite" — RAM Shortage to Hit the Market Hard in 2026

The Smartphone Recession: The Cause Was "AI's Voracious Appetite" — RAM Shortage to Hit the Market Hard in 2026

Smartphones have completely shifted their status from "cutting-edge gadgets to be replaced annually" to "tools of living infrastructure." Because of this, even a slight change in price can have a significant impact on household finances. Amidst this, the smartphone market might face the "biggest decline ever," not because the popularity of smartphones has suddenly waned, but because the "competition for parts" that support the insides of smartphones is intensifying.


According to the latest forecast by IDC (International Data Corporation) introduced by foreign media, global smartphone shipments in 2026 could decrease by 12.9% compared to the previous year, potentially reaching the lowest level in over a decade. What's more troubling is that while the number of units decreases, the average selling price is expected to rise. IDC predicts that the average selling price will increase by about 14%, reaching a record high of approximately $523. This means the market might shake in the least favorable way for consumers: "not selling but expensive."


The culprit is not "smartphone abandonment," but RAM shortage

The keyword at the center of this forecast is RAM (memory) shortage. The point is simple: as long as the world's memory production capacity is not infinite, if one place secures a large amount, another place will face a shortage.


And the presence that is increasing as the "side securing a large amount" is AI. Data centers that operate large-scale AI create not only enormous computing resources but also huge memory demands. Especially if production is pulled towards high-performance memory for AI (including peripheral areas for server use), it will affect the supply and price of memory used by smartphones and PCs. As a result, smartphone manufacturers face increased costs and are forced to either pass on the price increase, suppress specifications (keep memory capacity the same/increase it), or reorganize product lines.


This "RAMageddon" is not just a problem for smartphones alone. The rise in memory prices will also reflect on the prices of a wide range of devices, including laptops, small computers, and modular PCs. In other words, the AI boom, which we expected to make our lives more convenient and smarter, ironically ends up making the hardware around our lives more expensive.


The hardest hit are "cheap Androids"

When memory prices rise, the pain is not evenly distributed. According to IDC, budget-focused Android smartphones are particularly affected. The low-price range, which relies on small profit margins and high sales volume, can easily become unprofitable with just a few dollars increase in component costs. The options available to manufacturers are limited.

  • Raise prices (but the more price-sensitive segments will leave)

  • Reduce specifications (limit memory, storage, camera, etc.)

  • Withdraw from that price range altogether


An IDC representative mentioned the possibility that smartphones under $100 might become "permanently unprofitable." This is not just a prediction of price increases but a suggestion that the market structure itself might change. If the low-price range shrinks, the options for the segments that have supported smartphone proliferation so far will decrease. There might be an increase in the influx to used or refurbished markets, and the replacement cycle might further extend.


Scenario where "the strong get stronger"

In a phase of rising component costs, companies with the financial strength to absorb price increases and brands with high selling prices are strong. According to IDC's outlook, such environmental changes may advance market consolidation, potentially allowing major players like Apple and Samsung to increase their market share. Small and medium brands are likely to be caught in a bind, unable to sell if they raise prices, and running into losses if they don't.


The important thing here is that this is a separate axis from the "victory or defeat in technological competition." Even if a company can create attractive devices, if procurement costs and supply instability continue, it becomes difficult to sustain products. Especially for manufacturers competing in the low-price range, securing components becomes a lifeline. As a result, lineup reorganization, withdrawal, and integration will progress, making the market appear simpler, but from a consumer perspective, options are likely to decrease.


SNS Reactions: Anger, Cynicism, and Realism

 

This topic quickly caught fire on social media. The reactions can be broadly categorized into the following points.

  1. "It's unacceptable that essential goods become more expensive because of AI"
    The structure where the investment competition in AI affects the prices of smartphones and PCs purchased by general consumers has led to emotional backlash, with sentiments like "missing the point" and "who is this technological innovation for?" Particularly, in many regions and segments where smartphones are no longer considered "luxury items," there are concerns that price increases directly lead to information disparities.

  2. "In the end, it just delays replacements"
    On the other hand, there are many realistic voices saying, "If it gets expensive, I'll use my current device longer" or "I'll extend its life by replacing the battery." With smartphone performance maturing and noticeable differences becoming harder to perceive, the price increase is seen as merely accelerating the "evaporation of replacement demand."

  3. "The strong benefit again"
    If the low-price range struggles due to memory shortages, larger companies with more pricing freedom become more advantageous. On social media, there is repeated caution about "in the end, Apple and Samsung will become even stronger" and "small and medium companies will disappear," indicating a concern over "oligopolization."

  4. Skepticism about "Will the predictions come true?"
    There are also criticisms of the market forecasts themselves. Arguments like "won't supply increase," "prices will eventually stabilize," and "if demand cools, balance will be achieved" are common. Indeed, the semiconductor market is prone to fluctuations due to investment and supply-demand dynamics. Therefore, it's better to consider this forecast not as a "certain future," but as material to early imagine the impact "if prices and supply become tight."

Potential "Changes Close to Home"

So, what changes might fall into our daily lives? At present, the following three seem realistic.

  • Price increases and consolidation of entry models: Cheaper models are more affected.

  • Specification decline in the same price range: Memory and storage may remain the same, slowing growth.

  • Expansion of the used and refurbished market: Price increases for new products boost demand for used ones.


Furthermore, manufacturers are likely to advance innovations other than "raising prices." For example, reviewing capacity configurations, strengthening long-term support, expanding trade-ins, and optimizing installment payments are likely to increase as measures to lower the "psychological hurdle of replacement." For consumers, comparing based on "long-term use assumptions," such as OS update periods, ease of battery replacement, and repair costs, will become more important.


Conclusion: The "Competition for Resources" in the AI Era Changes Smartphone Norms

What this IDC forecast indicates is not just a simple smartphone recession. It suggests that the growth of AI could reshape the global resource allocation, particularly around semiconductors and memory, potentially changing the smartphone market's price range, player structure, and replacement behavior in a chain reaction.


The fact that "smartphones are getting more expensive" might not be the result of a spec competition, but rather a result of the world's priorities changing. If so, what we need to face is not just "which model is faster," but "how to use which device for longer" and "how to prepare for a future with fewer choices."


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