A rise in the need for computers and data centers to power AI is causing a massive shortage of RAM, driving memory prices sharply higher. Now, analyst firm IDC predicts that this will cause smartphone shipments to plummet by 12.9% this year, making it the biggest single-year dip in more than a decade.
Earlier this year, IDC reported that manufacturers shipped 1.26 billion devices in 2025. The firm predicts that figure will drop to just 1.12 billion this year.
“The memory crisis will cause more than a temporary decline; it marks a structural reset of the entire market, fundamentally reshaping the long‑term TAM [total addressable market], the vendor landscape, and the product mix,” said Nabila Popal, senior research director with IDC’s Worldwide Quarterly Mobile Phone Tracker, in a statement.
Image Credits:IDC
Popal said that because of memory shortage, the average retail price of a smartphone is expected to rise by 14%.
“We expect consolidation as smaller players exit, and low-end vendors face sharp shipment declines amid supply constraints and lower demand at higher price points. Although shipments will witness a record drop, smartphone ASP [average selling price] is projected to rise 14% to a record $523 this year,” she added.
Popal also noted that rising component costs could make the sub-$100 smartphone “permanently uneconomical,” pricing out phone makers that manufacture devices at that price point.
The firm said that, because of this trend, shipments in the Middle East and Africa will drop more than 20% year-over-year. China and the broader Asia Pacific region (excluding Japan) will also see declines of 10.5% and 13.1%, respectively.
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