AI Demand To Push Android Phone Prices Higher In 2026

According to recent industry analyses, although smartphone manufacturers have been trying to keep stable prices for Android devices released in 2025, this trend is probably not going to happen next year, in 2026. Rising production costs driven by global demand for memory components are expected to have a huge impact, causing a significant price increases across the whole Android market.

A major factor behind all the shift is the escalating demand for RAM, NAND chips, and other storage components, driven largely by the rapid expansion of AI tech; Data centers operated by companies like Google, Meta, Amazon, Nvidia, and OpenAI have dramatically increased their consumption of these chips, pushing consumer electronics further down the priority list.

Counting with higher profits in the corporate server sector, known suppliers such as Samsung, SK Hynix, and Micron are dedicating much of their manufacturing capacity to, guess who, enterprise clients; This redistribution has directly reduced the availability of components for smartphones, PCs, tablets, and TVs, leading to cost increases across the supply chain.

In the last couple of months, DRAM prices have surged between 70% and 80%, with some cases surpassing astonishing 170%, according to reporting from Chosun Biz. Although memory usually represents only 10% to 15% of a smartphone’s total cost, these price jumps significantly affect manufacturers’ budgets.

In 2025, brands avoided passing costs on to consumers by reducing profit margins and making lots of internal adjustments, but such measures are no longer sufficient; Next year, companies will indeed attempt to cut costs by reducing specs related to displays, batteries, or even charging features. Even if they decide to do that, these strategies have limitations, making price increases unavoidable.

The adoption of on-device AI, such as models like Google’s Gemini Nano, further raises hardware requirements, requiring higher amounts of fast RAM and storage to operate effectively. On top of that, extended software support policies (which now reach up to 7 years of updates for some brands) push manufacturers to use more durable and higher-end components.

To make matters even worse, SoC prices add additional pressure; The upcoming Snapdragon 8 Elite Gen 5, to be featured in flagship devices released next year, is already 20% more expensive than the current generation, potentially reaching US$190 per chip. Brands are likely to offset this increase by adjusting retail prices.

Early signs of this trend can already be observed in other markets, for example, PC makers are considering 15% to 20% price adjustments, and even products like the affordable Raspberry Pi have seen price hikes due to RAM shortages. Game consoles and TVs are expected to follow the same pattern.

The nominal launch prices for premium smartphones brands will probably be kept, but experts are predicting less deals and weaker incentives for trade-ins. Mid-range devices, which typically have smaller profit margins, will feel the impact first, either through higher prices or slower year-over-year improvements.

Filed in Cellphones. Read more about AI (Artificial Intelligence), Amazon, Android, Meta, NVIDIA, OpenAI and Samsung.