Technology
Budget smartphone shipments decline sharply as rising memory costs squeeze margins
CNBC reports that surging memory expenses are pushing phonemakers to curtail production of sub-$100 devices.
The short version
- Global shipments for handsets priced under $100 dropped by nearly 60% year-over-year in the second quarter of 2026, according to IDC.[CNBC]
- Hardware producers are feeling margin pressure because memory makes up almost 60% of component costs for phones priced under $200, an Omdia analyst noted.[CNBC]
- Device makers such as Xiaomi have significantly cut their low-end exposure, with Xiaomi's sub-$100 shipment share falling from 27.7% in early 2025 to 11.2% in 2026.[CNBC]
- Counterpoint Research projects that handset prices are unlikely to drop back to 2024 levels because chipmakers lack incentives to supply low-end capacity.[CNBC]
Key facts
- Worldwide shipments of smartphones selling for under $100 dropped nearly 60% year-over-year in the second quarter of 2026.[CNBC]
- Sub-$100 handsets dropped from 27.7% of Xiaomi's global device shipments in the first half of 2025 to 11.2% a year later.[CNBC]
- Memory makes up roughly 60% of component costs for phones priced under $200, according to an Omdia analyst.[CNBC]
- An IDC executive stated that entry-level smartphones are turning uneconomic to build.[CNBC]
- Xiaomi's average selling price has climbed about 30% to $197 since 2023, according to Counterpoint Research.[CNBC]
What remains uncertain
- Whether memory manufacturers will eventually expand low-end capacity if market dynamics shift remains uncertain, though analysts view a return to earlier price levels as improbable.[CNBC]
Sources
Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.