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The smartphone market just hit its biggest slump in over ten years, according to Semafor. Shipments dropped 11% in Q2 2026, the lowest since 2013. It’s not just people buying fewer phones—there’s a global memory shortage making things worse. Ultimately, it means that next year you might have to pay more for an entry-level phone, for far less power.
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It’s mainly thanks to AI
Memory makers like Samsung and Micron are now focused on producing high-end chips for AI data centres rather than standard phone parts.
AI chips make more money, so memory suppliers are giving phones the cold shoulder. Prices for DRAM and NAND flash (the stuff inside every phone) have shot up. For cheaper phones, memory can account for up to 60%% of the cost, so when prices rise, these phones either get more expensive or just aren’t worth making.
Entry-level phones now cost over 50% more than they did last year, so many people are priced out. PC builders aren’t happy either—memory kits that were $100 are now closer to $350, and good luck finding them in stock.
This hit budget phone makers like Xiaxomi and OPPO the hardest. Their shipments dropped fast because they had to raise prices.
Meanwhile, Apple and Samsung are doing just fine. They actually grew their sales or grabbed more market share, even with the slump.
Apple kept prices steady while everyone else had to raise theirs. The iPhone 17 did great, and Apple grabbed a record 20% of the global market. Samsung, still on top with 24% market share, used its supply chain smarts to keep products on shelves, even when cheaper phones weren’t selling.
For the average user, it means one thing: cheap, powerful phones are on pause for now. As long as AI keeps hogging all the memory, phone makers will focus on pricey models. If you want a deal, you might have to go refurbished or second market. If you do, make sure to check the battery health and ask if the phone has been factory reset. Look for sellers offering a warranty or return window, and avoid devices with signs of water damage or a locked bootloader. Buying from reputable shops or platforms with buyer protection can make a big difference, and always compare prices to new models to make sure you are getting a real deal.