Smartphone prices set to spike amid memory shortages

2026-03-17 - 11:00

At this year’s Mobile World Congress (MWC), in Barcelona, excitement over new smartphone launches was tempered by growing concern that devices could soon reach record prices. Major brands such as Samsung, Huawei, Honor and Tecno have already unveiled new models, while Apple is expected to follow later in 2026. Key driver Yet analysts warn that the global smartphone industry is entering a difficult period, with growth projections moving downward. The key driver behind this slowdown is the rising cost of memory components. Demand for DRAM and NAND flash storage has surged due to the artificial intelligence (AI) boom, with data centres consuming vast quantities of memory. This has left smartphone manufacturers scrambling for supply, pushing costs higher across the industry. ALSO READ: Vodacom scraps data charges for SABC streaming platform Price hike Ernst Wittmann, TCL’s regional manager for southern and East Africa, explained that PC RAM prices spiked in 2025 and that smartphones are next in line. “Entry-level Android smartphones are likely to be particularly hard hit because customers in this segment are more price sensitive and because RAM and storage is a higher portion of the manufacturing cost,” he said. Memory typically accounts for 10% to 15% of a smartphone’s bill of materials, meaning overall production costs have risen by about 10%. With margins already thin, most manufacturers are expected to pass these increases directly to consumers. Global smartphone shipments are also forecast to decline by around 7% year-on-year in 2026, according to Omdia’s latest outlook. South Africa For South Africa, the implications are serious. Wittmann noted that handsets currently retailing for R1 600 could soon cost R1 800 or more, a jump that risks pricing out many entry-level buyers. Around 80% of prepaid mobile phones sold locally are under R3 000, so even modest increases could significantly affect accessibility. He warned that shortages may worsen as RAM producers shift focus to the lucrative data centre market, leaving budget devices with limited supply. Government policy Beyond higher prices, consumer choice may shrink as manufacturers abandon low-margin models. Even second-hand and refurbished devices are likely to rise in cost. This trend threatens to undermine digital inclusion, reversing years of progress in making smartphones more affordable. Government policy has offered some relief. In April 2025, the 9% ad valorem excise duty on smartphones priced below R2 500 was scrapped, helping narrow the digital divide. But with memory costs climbing, sustaining affordability in 2026 will be a formidable challenge. ALSO READ: The future of travel is AI: What you should know