AI-driven RAM shortage may make Rs 9,000 phones ‘permanently uneconomical’: IDC
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An artificial intelligence-driven RAM shortage could make smartphones priced under roughly Rs 9,000, permanently uneconomical and trigger the steepest annual shipment decline in over a decade, according to International Data Corporation.
The analyst firm said the AI-fuelled “RAMageddon” is expected to cut global smartphone shipments by 12.9% this year, resulting in the lowest annual shipment volume in more than ten years.
For years, the smartphone industry recorded steady growth, with manufacturers launching new models frequently. However, the memory shortage has pushed up component costs, driving the average selling price of smartphones up by a projected 14%, IDC said.
“While memory prices are projected to stabilise by mid-2027, they are unlikely to return to the previous level,” said Nabila Popal, senior researcher at IDC. She added that sub-$100 smartphones will become “permanently uneconomical,” and warned that smaller players could exit the segment as they face shipment declines alongside higher prices.
Regionally, smartphone shipments in the Middle East and Africa are expected to drop 20% year-on-year. China is projected to see a 10.5% decline, while the Asia Pacific region excluding Japan may witness a 13.1% fall.
Earlier, Counterpoint had forecast a 2.6% decline in shipments in 2025.
Meanwhile, Nothing CEO Carl Pei recently cautioned that rising component prices could force brands to raise smartphone prices by around 30% or reduce hardware specifications. He said the “more specs for less money” model would no longer be sustainable in 2026.
