Smartphone prices have moved so far, so fast that, in IDC’s words, the average handset now costs roughly $147 more than it did a couple of years ago. That figure comes from the research firm’s latest Worldwide Quarterly Mobile Phone Tracker forecast, published on 26 August, which puts the global average selling price at $581 for 2026 — up 27.6% in a single year, and revised upward from the $550 IDC projected just one quarter ago.
The same forecast expects worldwide shipments to fall 16.7% in 2026, to just over a billion units — a sharp downgrade from the 13.9% decline IDC predicted three months ago, and what the firm calls the steepest annual contraction the industry has ever recorded. The unusual part is that the market is shrinking and getting more valuable at the same time: total market value still grows 6.3%, to $613 billion. Fewer phones, higher prices, more money.
Why smartphone prices are rising
The cause is memory. NAND and DRAM costs are up more than 300% year over year, and IDC expects them to keep climbing until at least 2028. Vendors absorbed some of that at first; they have now largely stopped. The second half of 2026 is forecast to be brutal on volume, with shipments down 27.2% year over year as the increases reach shelves.
Worth being blunt about what this money is buying you. The memory in short supply is the memory that on-device AI runs on — the extra RAM your phone needs to hold a model in memory, the extra storage the features want. Whether or not you use any of it, you are paying for it at the till. IDC’s Francisco Jeronimo, Vice President for Worldwide Client Devices, put it directly in the firm’s blog post: “The memory tsunami that we warned about is now hitting the market in full, and consumers are starting to pay the AI bill.”
The cheap phone is the thing actually disappearing
Averages hide where the damage lands. IDC counts 173 million smartphones priced under $100 shipped last year, and says that segment is now facing an existential crisis — it fell almost 60% year over year in Q2 2026 as Android vendors on razor-thin margins simply deleted those models and pushed buyers up the range. Emerging markets, where those phones do the most work, are expected to drop more than 20% this year.
Developed markets have a cushion that most of the world does not: IDC notes the premium tier is holding up partly because long-term interest-free financing is common in places like the US and UK. Spreading $1,200 over 24 months is a different experience from paying it at once. Where that financing is not the norm, a price rise is just a price rise.
Android is carrying almost all of the decline
The pain is not evenly split by platform. IDC has Android shipments falling 24.3% in 2026, with Android’s share of the market dropping seven percentage points in a single year, precisely because Android owns the entry tiers being cut. iOS moves the other way — up almost four points to a record 23.6% share, with shipments down just 1.3%, because Apple barely plays in the segment that is collapsing. HarmonyOS nearly triples to 51 million units as Huawei uses disciplined pricing to take share in China.
Almost nothing in the forecast grows. Foldables are the exception, up 12.6% in 2026 to 22.9 million units and accelerating to around 27 million in 2027 — a category IDC expects Apple’s entry to reshape in the second half of this year.
What this means if you are buying a phone
Practically: expect to hold your current phone longer, expect the model you replace it with to cost more than its predecessor did, and expect the budget tier to be thinner than you remember. If you are shopping at the bottom of the market, the specific phone you were planning to buy may not have a successor at all. Trade-in values and carrier promotions matter more in that environment than they did two years ago, because they are the only part of the price still negotiable.
One caveat: this is a forecast, not a result. IDC has already revised these numbers upward once this quarter, which cuts both ways — the estimate is moving, and so far it has only moved in the direction of higher prices. For a different firm’s read on the same year, our earlier report on Counterpoint’s 2026 shipment forecast landed on a shallower decline, and IDC’s own India shipment data for H1 2026 shows how the squeeze is already playing out in one price-sensitive market.
Sources: IDC
