The consultancy Omdia reported that the increasing cost of DRAM and NAND chips is making it difficult to manufacture low-cost mobile phones. According to the analysis, memory costs represent a significant portion of components in affordable models.
Spending on memory accounted for approximately 60% of component costs in cell phones priced up to US$ 400 during the first quarter of 2026. This proportion rose to 64% in the basic device category, whose maximum price is US$ 99.
Given this scenario, many manufacturers are seeking to mitigate operational costs by using more affordable alternatives, such as less sophisticated screens or sensors, or by reducing the amount of RAM or internal storage. However, in very cheap devices, this strategy is limited, as they already have an economical component structure.
Omdia's projections indicate that global sales of cell phones costing up to US$ 400 are expected to drop by 22% in 2026. There is no expectation of recovery for this segment, as the costs associated with RAM and internal storage chips continue to rise.
In contrast, the market for cell phones priced above US$ 400 is expected to see a growth of 5.7% in shipments throughout 2026. Although this category is also affected by the increase in component costs, there is greater flexibility for adjustments.
Omdia observed that manufacturers are favoring mid-range and high-end smartphones because it is more feasible to reallocate components in these segments. For example, some mid-range models may use cheaper LTPS type OLED screens, allowing LTPO OLED panels (more expensive) to be reserved only for the most advanced models. Furthermore, consumers of devices over US$ 400 show lower price sensitivity, facilitating the absorption of cost pass-throughs by the industry.
