If you are thinking about upgrading your phone, here is a heads-up that could save you some stress. Memory chips that power everything from smartphones to smartwatches are getting redirected to AI data centers, which means fewer parts for consumer gadgets right now.
According to CNN, that squeeze is pushing up costs and may nudge prices higher on devices in early 2026, especially at the budget end of the market. Research firms expect memory prices to jump about 30% in late 2025 and another 20% early next year, which has already made phones 8% to 10% more expensive to produce in 2025. That does not always translate to a price hike at the checkout, but it often puts pressure on cheaper Android models where margins are thin.
There is more. Micron is exiting the consumer memory business to chase AI data center demand, and Samsung says shortages for mobile and PC memory could intensify. IDC expects the smartphone market to dip by 0.9% in 2026 partly because of these supply constraints.
The average selling price of a new phone is projected to rise to about 465 dollars in 2026 compared with 457 dollars in 2025. None of this means you need to rush into a purchase.
It does mean a little planning goes a long way, whether that looks like locking in a holiday deal, choosing a slightly older flagship that still feels fast, or waiting until late next year when analysts think supply should rebalance.
What makes this truly noteworthy is the hidden driver behind the price pressure. AI is not only changing software features, but it is also reshaping the hardware supply chain from the server room all the way to your purse. As Nabila Popal of IDC puts it, “It’s going to be almost impossible for them to not raise prices.” That is a clear signal that entry and mid-tier shoppers could feel the pinch first.
Why this matters today. If you manage a household budget or help family members upgrade, the timing of a phone purchase could affect what storage size or model you can comfortably afford.
The good news is that analysts expect the pendulum to swing back as factories adapt, so patience may pay off with better prices or at least smaller increases later in 2026. For now, shop smart, compare total value not just headline discounts, and consider models with efficient performance rather than chasing the newest spec sheet.
Curious about the full picture, including which brands and segments may move first and by how much. Read the complete report on CNN for all the details.
