<div id="readability-page-1"><div id="ArticleBody-InlineImage-108233306"><div><div><p>The logo of an Apple Store is seen reflected on the glass exterior of a Samsung flagship store in Shanghai, China Monday, Oct. 20, 2025.</p><p>Wang Gang | Feature China | Future Publishing | Getty Images</p></div></div></div><div><p>A shortage of memory chips fueled by artificial intelligence players is likely to cause a price rise in smartphones in 2026 and a drop in shipments, Counterpoint Research said in a note on Tuesday.</p><p>Smartphone shipments could fall 2.1% in 2026, according to Counterpoint, versus a previous outlook of flat-to-positive growth.</p><p>Shipments do not equate to sales but are a measure of demand as they track the number of devices being sent to sales channels like stores. </p><p>Meanwhile, the average selling price of smartphones could jump 6.9% year-on-year in 2026, Counterpoint said, in comparison to a previous forecast of a 3.6% rise.</p><p>This is being driven by specific chip shortages and bottlenecks in the semiconductor supply chain, which are pushing up component prices.</p><p>The continued build-out of data centres globally has hiked demand for systems developed by <span id="RegularArticle-QuoteInBody-2">Nvidia<span><span id="-WatchlistDropdown"></span></span></span>, which in turn uses components designed by SK Hynix and Samsung — the two biggest suppliers of so-called memory chips. </p></div><div><p>However, a specific component called dynamic random-access memory or DRAM, which is used in AI data centers, is also critical for smartphones. DRAM prices have surged this year as demand outstrips supply. </p><p>For low-end smartphones priced below $200, the bill of materials cost has increased 20% to 30% since the beginning of the year, Counterpoint said. The bill of materials is the cost of producing a single smartphone. </p><p>The mid and high-end smartphone segment has seen material costs rise 10% to 15%. </p><p>&#34;Memory prices could rise another 40% through Q2 2026, resulting in BoM costs increasing anywhere between 8% and over 15% above current elevated levels,&#34; Counterpoint said. </p><p>The rising price of components could be passed on to consumers and that will in turn, drive the rise in the average selling price.</p><p>&#34;<span id="RegularArticle-QuoteInBody-3">Apple<span><span id="-WatchlistDropdown"></span></span></span> and Samsung are best positioned to weather the next few quarters,&#34; MS Hwang, research director at Counterpoint, said in the note. &#34;But it will be tough for others that don't have as much wiggle room to manage market share versus profit margins.&#34;</p><p>Hwang said this will &#34;play out especially&#34; with Chinese smartphone makers who are in the mid-to-lower end of the market. </p><p>Counterpoint said some companies may downgrade components like camera modules, displays and even audio, as well as reusing old components. Smartphone players are likely to try to incentivize consumers to buy their higher-priced devices too. <br/></p></div></div>

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<p>Counterpoint Research predicts a 6.9% rise in smartphone prices by 2026 due to AI chip shortages, impacting memory chip supply. Shipments may drop by 2.1%. Component costs, especially DRAM, are rising, affecting production costs. Apple and Samsung are better positioned to handle this, while Chinese manufacturers may struggle, potentially downgrading components to manage costs.</p>

- A shortage of memory chips, driven by AI demand, is forecasted to lead to a 2.1% decline in smartphone shipments and a 6.9% increase in average selling prices in 2026, according to Counterpoint Research.  
- The rising costs are attributed to specific chip shortages, particularly in dynamic random-access memory (DRAM), crucial for both AI data centers and smartphones.  
- Major brands like Apple and Samsung are better positioned to navigate these challenges, while smaller brands may struggle to compete with rising prices and may resort to using downgraded components.

The AI chip shortage could raise smartphone prices — new research spells out by how much