International Data Corporation (IDC) has released a report predicting that smartphone production in 2026 will drop by 12.9% compared to 2025. Only 1.12 billion phones are expected to be manufactured this year and this is due to the sudden increase in RAM prices after high demand from the artificial intelligence (AI) industry.
Rising component costs are forcing manufacturers to raise prices and at the same time demand for high-priced devices is expected to fall. This combination will cause production to decrease. It is already seen that manufacturers such as ASUS are withdrawing from offering new smartphone models this year.
The average selling price of smartphones in 2026 is expected to increase by 14% to $523 each, with the sub-$100 market being the hardest hit even after memory prices are expected to return to normal by mid-2027. Smartphone production is expected to increase by 2% in 2027, and then 5.2% in 2028 but will not return to pre-2025 levels.
Meanwhile, the Samsung Galaxy S26 series launched yesterday is priced at up to RM600 higher with smaller storage options compared to the Galaxy S25 series. This will be a trend this year with manufacturers being more careful to use existing RAM inventory for the models they offer to consumers.
