Mobile Prices: Inflation will hit your pockets! Buying a new phone in 2026 will be expensive, with prices rising by up to 6.9%

Smartphone Prices: If you are planning to upgrade from an old phone to a new one or two years, then it is better to buy a new phone now in 2025 itself, because recently it has come to light that the prices of smartphones may increase next year and the reason behind this is Artificial Intelligence.

According to new research from Counterpoint, the tremendous demand for AI infrastructure is reaching consumers. As data centers increasingly use essential parts, smartphone manufacturers are under pressure, increasing production costs and almost certainly pushing prices higher. At the root of the problem is a small but crucial component: memory.

Prices will increase so much

Counterpoint expects the average selling price of smartphones worldwide to increase by 6.9 percent in 2026, a much larger increase than previously estimated. 

As always, these rising costs will directly impact customers. The impact isn't the same for all brands, with industry giants like Apple and Samsung better positioned to weather this crisis. Smaller manufacturers, especially those focused on mid-range and budget devices, will face greater difficulties.

Next-generation smartphones and advanced AI servers rely heavily on the same types of memory chips, especially DRAM. These chips are crucial for handling demanding tasks, whether it's running a powerful AI model in a server rack or keeping your phone responsive while switching between apps, games, and photos.

The problem is that AI data centers, especially those running on advanced Nvidia-based systems, are far more profitable for memory suppliers than smartphones. 

As global investment in AI grows, manufacturers are prioritizing these higher-margin customers, leaving fewer chips available for consumer electronics. As a result, supply is shrinking and prices are rising sharply.

The situation may worsen by 2026

Counterpoint analysts warn that this imbalance is not temporary. In fact, the situation could worsen by 2026. Memory prices are expected to rise by 40 percent in the first six months of that year, putting further pressure on smartphone production costs.

This increase is already reflected in the "Bill of Materials," or BoM, which is the total cost of the components needed to make a phone. Budget devices priced under $200 (approximately Rs. 18,064) have been the most affected, with production costs rising by 20% to 30% in just one year. Mid-range and premium phones are also not spared, with production costs rising by 10% to 15%.

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