When AI Makes It Harder for People to Buy Cheap New Phones...
KOMPAS.com - Artificial Intelligence (AI) technology has recently demonstrated an unprecedented new impact that affects end-users. Thanks to AI, users are now finding it increasingly difficult to buy cheap mobile phones or smartphones.
How could it be otherwise? Demand for AI is rising, leading to massive development efforts. Consequently, the need for data centre infrastructure to develop AI has also increased. These AI data centres heavily rely on memory and chip components.
The tangible impact of AI can be traced through the recent global smartphone market conditions. The latest reports from two renowned research firms, Counterpoint Research and IDC, both indicate that the global smartphone market share declined in the first quarter (Q1) of 2026 (January-March).
IDC reported that the global smartphone market in the first quarter of 2026 fell by 4.1% compared to the same period the previous year (year over year, YoY).
In the Q1 2026 period, IDC noted that 289.7 million devices were shipped. This number of smartphone shipments decreased compared to Q1 2025, which had a volume of 302 million units.
Meanwhile, Counterpoint estimates a higher decline in the global smartphone market share than IDC. Counterpoint states that the smartphone market in Q1 2026 dropped by 6% compared to the same quarter the previous year (year-on-year/YoY).
Counterpoint did not provide details on the number of smartphone units shipped or delivered globally in the Q1 2026 and Q1 2025 periods.
Nevertheless, both IDC and Counterpoint attribute the sluggish smartphone market at the start of the year to a memory crisis and rising smartphone prices.
According to IDC Senior Research Director Nabila Popal, the memory crisis directly impacts smartphone shipments and demand.
“Limited memory availability has forced shipment cuts, while significantly higher memory prices are driving up raw material costs and prompting price increases by many leading brands,” said Popal, quoted from IDC’s official blog.
In line with IDC, Counterpoint also blames the shortage of memory components, particularly DRAM and NAND types, for the weak mobile phone market.
According to Counterpoint, the memory shortage occurred because supplies are prioritised for AI data centre development rather than for consumer devices like smartphones.
IDC and Counterpoint both agree that the AI-induced memory crisis has caused smartphone prices to rise, as manufacturers must adjust production costs to secure scarce component supplies.
Nabila Popal from IDC explained that smartphones in some developing country markets have now experienced price increases of up to 40-50%. This rise is said to affect demand in price-sensitive markets.