The AI memory boom is making entry-level smartphones harder to buy

Chinese handset makers have sharply reduced entry-level phone projects as memory costs rise, Counterpoint analyst Ivan Lam told Rest of World. Manufacturers are prioritizing more profitable premium products while AI infrastructure competes for memory supply.

The outlet cites Counterpoint’s September analysis: existing smartphone models had become about 15% more expensive globally during 2026, while new launches cost roughly 25% more than the previous year’s. These figures describe different comparisons; they should not be combined into a single price increase. Regional increases were uneven, with the reporting putting India at 21% and the Middle East and Africa at 18%, versus 5% in the US.

The risk extends beyond consumers delaying an upgrade. GSMA had projected almost 800 million additional mobile-internet users by 2030, but now worries that more expensive handsets could obstruct that expansion. This is a concern about a forecast, not a measured reversal in connectivity.

Analysis: The same investment boom that promises cheaper intelligence can raise the cost of the physical device needed to access it. When manufacturers respond to higher component costs by abandoning low-margin models, poorer buyers lose both purchasing power and product choice.