Price hikes in the world of technology are inevitable, especially with RAM and NAND flash shortages, and it looks like they’re also impacting those that manufacture budget devices. A recent Counterpoint Research Korea report highlights that DRAM prices have risen more than 50% as of the first quarter of 2026, compared to the previous quarter. Moreover, NAND Flash prices have risen more than 90% in that same period. Ultimately, it means that the bill of materials (BOM), the complete list of components in a phone build, is rising exponentially across the industry.
Manufacturers making entry-level devices with at least 6 GB of LPDDR4X RAM and 128 GB eMMC storage have seen BOM costs increase by 25%, with memory costs alone accounting for nearly 43% of the entire BOM, meaning RAM is the most expensive component in the devices. Mid-priced devices, defined as the $400 to $600 range, are also seeing cost increases, by as much as 20% for DRAM and 16% for NAND Flash modules. Of course, premium and flagship phones above $800 are seeing price increases, but it’s those entry to mid-level offerings that are really going to be impacted.
It’s difficult to offer a budget option if the components are worth more than the entire device unless the manufacturer sacrifices costs elsewhere. An analyst on X points out that entry-level smartphones and devices will likely start disappearing, with brands like MediaTek and other Chinese manufacturers taking some heavy hits. It may not be long before some of the best budget smartphones see price hikes or are pulled from shelves completely.
Why would budget Android phones die?
The Counterpoint Research report isn’t the only one that paints a grim picture for budget Android phones. An IDC report (via Bloomberg) posits that the global smartphone market will shrink by nearly 12.9% in 2026 because of the “unprecedented memory chip shortage.” Realistically, the shortage and rising prices are sending shockwaves across the entire tech industry, with a handful of gadgets that could jump in price, including your next smart TV.
But in most cases, the climbing prices won’t choke out the manufacturers. It’s not ideal, but they’ll raise prices. Budget phone manufacturers risk losing their install base by raising prices too much — they’re budget-friendly for a reason. Mid-level to premium phone sales will likely decrease, as well. The IDC report already points out that phone shipments are down to an estimated 1.1 billion in 2026, compared to 1.26 billion in 2025. The “historic decline” is certainly going to hit those cheaper options hardest, where the phone makers can’t afford to build their devices at a low cost anymore, and customers can no longer afford to buy them at the increased prices, or don’t want to.
Bloomberg says companies are dealing with this by “reining in specifications, eliminating unprofitable entry-level models and pushing consumers to buy more premium devices.” Per ITPro, Gartner published a report with similar findings for the PC market, which is to say they’re focusing on premium models and planning to phase out budget picks. It doesn’t bode well for companies primarily offering those budget picks.
