Smartphone shipments fell 11% in the most recent quarter, marking the lowest second‑quarter volume since 2013, according to Counterpoint. The plunge is traced to sharply higher DRAM and NAND costs, which have squeezed manufacturers' margins and dampened consumer demand, especially for devices under $500.
Market research firm Omdia notes that memory now makes up roughly half of the bill‑of‑materials for budget phones, versus just over a quarter for flagship models. The shift toward AI‑focused computing has redirected chip supplies away from consumer gadgets, further inflating component prices and prompting quicker price hikes for lower‑end devices.
Apple and Samsung, whose lineups lean heavily toward premium pricing, are better insulated from the cost surge and stand to gain market share as budget‑oriented rivals struggle. Analysts will be watching how pricing strategies evolve and whether supply‑chain constraints ease as the AI chip demand stabilizes.
