Smartphone prices are expected to increase in 2026 due to RAM shortage caused by AI boom. PixelsEffect/Getty Images Smartphone prices may rise in 2026 due to increased demand for RAM in AI data centers. IDC and Counterpoint report that RAM supply is shifting from phones to support AI technology. Counterpoint predicts memory prices could rise 40%, raising average smartphone prices by 6.9%. Your smartphone's price might increase in 2026 — and you'll have AI to thank for that. According to a December 2025 report from global market intelligence firm International Data Corporation (IDC), the manufacturing of Random Access Memory (RAM), used to store data in devices such as computers and phones, is being reallocated to support AI data centers, rather than being incorporated into phones and PCs. Just as your smartphone runs faster with more memory available, so do AI data centers. As more companies rely on AI tools, the importance of reliable processing power increases, leading to the increased usage of more RAM. IDC expects DRAM (Dynamic Random Access Memory) supply growth to be below historical norms in 2026 at 16% year-on-year. As the hunt for affordable RAM becomes increasingly challenging for smartphone manufacturers like Apple, Google, and Samsung, their costs are likely to rise, which could impact the prices they charge consumers. "In the case of the upcoming memory crisis, this is something that will hit the market hard," IDC senior research director Nabila Popal told CNET in December. "Those vendors will have almost no choice but to pass the increased cost to consumers." Market analysis firm Counterpoint also expects a slower year for all phone manufacturers. The firm projects global smartphone shipments to decrease 2.1% in 2026. The firm's research suggests that the price for memory could increase 40% through the second quarter of 2026, as a device's memory can represent anywhere from 10% to 20% of the total bill of materials. Larger manufacturers with a broader range of products offered, in terms of price, should fare better than others, according to Counterpoint senior analyst Yang Wang, while lower-end markets will likely be hit the hardest. "Apple and Samsung are best positioned to weather the next few quarters," Wang said. "But it will be tough for others that don't have as much wiggle room to manage market share versus profit margins. Even still, Counterpoint predicts that average selling prices will increase by 6.9%. For people looking to buy the iPhone 17 Max base model, that could mean eventually paying closer to $1,281, up from the $1,199 price tag announced in 2025. Read the original article on Business Insider