Highlights
This series is presented in two parts. As the second installment, this article delves into how the continuous rise in memory costs is further exacerbating the polarization of the smartphone market. Faced with soaring memory costs, smartphone manufacturers are cutting or maintaining memory configurations for mid-to-low-end models, while high-end models continue to increase storage capacity and overall specifications.
If you missed the first part of this series, "Surging Memory Costs to Cause a 22% Decline in the Global Smartphone Market Below $400," this article from Omdia continues to analyze in detail how rising DRAM and NAND flash memory prices are reshaping the cost structure of the smartphone market and exerting continuous pressure on the entry-level smartphone segment.
Memory price increases that began in the second half of last year have further intensified in the first half of this year. Driven by year-over-year increases of up to 200% in DRAM and NAND flash memory prices, smartphone retail prices have continued to rise, further suppressing consumer demand for entry-level smartphones. Consequently, Omdia forecasts that global smartphone shipments this year will decline by 12% compared to last year.
To cope with mounting cost pressures, smartphone manufacturers are scaling back their low-end product lines and allocating more resources to the mid-to-high-end market. Meanwhile, since high-end smartphone consumers are relatively less sensitive to price increases, manufacturers continue to steadily improve the performance and hardware configurations of high-end models, even as Bill of Materials (BOM) costs keep climbing.
According to Omdia's "Quarterly Smartphone Technology Trends Analysis – 1Q26" report, despite the substantial increase in memory prices, the total bit capacity of smartphone memory (DRAM and NAND flash) has maintained steady growth. In the first quarter of 2026, global smartphone shipments grew by only 0.5% year-over-year, but the total capacity of smartphone DRAM and NAND flash memory increased by 6.1% and 10.7% year-over-year, respectively, with the growth rate of NAND flash capacity consistently outpacing that of DRAM.
Jusy Hong, Senior Research Manager at Omdia, noted that as smartphone camera megapixels steadily advance and user-generated content (UGC) such as videos and photos continues to grow, the growth rate of storage capacity is significantly faster than that of DRAM capacity.
In the first quarter of 2026, the average configuration of global smartphones reached 8.3GB of DRAM and 279GB of NAND flash memory, representing a 5.5% and 10.1% increase from 7.8GB and 253GB in the same period last year, respectively.
However, this growth has been driven almost entirely by high-end models. Against the backdrop of mounting cost pressures, mid-to-low-end smartphone manufacturers are steadily reducing the memory configurations of their products to control overall device costs.
In the first quarter of 2026, the average DRAM capacity of global smartphones reached 8.3GB, an increase of 0.5GB compared to the same period last year. In recent years, the average DRAM capacity of smartphones has seen steady growth, increasing by 3GB from 5.3GB in the first quarter of 2022.
This growth trend reflects that smartphone manufacturers have historically increased DRAM capacity to meet the growing consumer demand for high-performance application experiences, such as large mobile games and smoother multitasking. However, faced with the cost pressures brought by the recent substantial surge in memory prices, manufacturers are actively taking measures to alleviate profitability pressures. For mid-to-low-end smartphones, manufacturers generally maintain memory configurations at the level of previous-generation products or cancel the high-storage-capacity versions originally offered within the same product lineup. As a result, the average DRAM capacity of smartphones priced below $400 has declined compared to last year.
A similar trend is also observed in NAND flash memory. Although the average storage capacity of global smartphones continues to grow, a breakdown by different price segments reveals that the NAND flash memory capacity for entry-level and mid-range smartphones has actually decreased.
As financial pressures from continuously rising memory costs intensify, smartphone manufacturers are further scaling back their entry-level product portfolios and shifting their product mix toward higher-margin mid-to-high-end models. Meanwhile, to meet consumers' advancing performance expectations for high-end products and to support retail price increases, high-end and flagship smartphones continue to steadily upgrade their memory configurations. Jusy Hong noted that this differentiated product strategy will further exacerbate the polarization of memory configurations in the smartphone market this year: high-end models will continue to increase storage capacity, while entry-level models face a trend of memory configuration downgrades.
Author: Jusy Hong, Senior Research Manager, Mobile Devices
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