A global RAM shortage triggered by surging AI data center demand will cause smartphone shipments to plummet by 12.9% in 2026, marking the steepest single-year decline in over a decade, according to IDC. The research firm projects shipments will fall from 1.26 billion devices in 2025 to just 1.12 billion this year.

Nabila Popal, senior research director at IDC, warns this crisis represents a "structural reset" of the entire smartphone market. Average retail prices are expected to rise 14% to a record $523 as memory constraints force manufacturers to either increase prices or downgrade specifications. The shortage threatens to make sub-$100 smartphones "permanently uneconomical" as rising component costs squeeze profit margins.

The impact will vary dramatically by region, with Middle East and Africa facing over 20% shipment declines. China and Asia Pacific (excluding Japan and China) will see drops of 10.5% and 13.1% respectively. The crisis will likely trigger market consolidation, with smaller players and low-end vendors struggling to survive as supply constraints and higher prices reduce demand in entry-level segments.