The smartphone industry could experience a record-breaking decline in 2026 as a result of the RAM shortage stemming from memory-hungry AI giants. That’s according to the latest report from the International Data Corporation (IDC), which forecasts smartphone shipments to plummet 12.9 percent this year, marking its “lowest annual shipment volume in more than a decade.”

At the same time, the average selling price for smartphones is set to hit new highs, with IDC predicting a 14 percent increase to a record $523. “While memory prices are projected to stabilize by mid-2027, they are unlikely to return to previous level,” IDC senior researcher Nabila Popal says, adding that the sub-$100 phone segment will become “permanently uneconomical.” Next week, Apple is rumored to announce a new edition of its budget smartphone as the “iPhone 17e,” which could give a hint about where things are going.

The memory shortage is expected to impact budget-friendly Android smartphones the most, as the rising costs of components leave them with “no choice but to pass the costs on to end users,” Francisco Jeronimo, the vice president for IDC’s Worldwide Client Devices, says in the report. That could result in smaller brands exiting the industry, while allowing Apple and Samsung to grab more market share, according to Popal.