Beancounters at Omdia say surging DRAM and NAND costs are deepening polarisation across the smartphone market, as vendors cut or freeze memory in low- and mid-range devices.
The second part of Omdia’s blog series follows “Global smartphones priced below $400 will decline by 22 per cent as memory costs soar”, which explains how pricier memory is squeezing the budget segment.
The memory price surge started in the second half of last year and worsened through the first half of this year. Omdia reckons year-on-year memory price hikes of up to 200 per cent are pushing up retail prices and choking demand for budget smartphones.
Global smartphone shipments are now projected to shrink by 12 per cent compared with last year.
To cope with the cost squeeze, smartphone vendors are trimming their low-end lineups and shifting their focus to mid-range and high-end models. Premium buyers are less likely to flinch at price rises, so vendors are still boosting performance and specifications despite swollen bills of materials.
According to Omdia’s Quarterly Smartphone Technology Trends Analysis, 1Q26 report, total smartphone memory bit capacity has continued to rise despite brutal pricing. Global smartphone shipments rose by just 0.5 per cent year-on-year in the first quarter, but total DRAM capacity climbed 6.1 per cent and NAND storage jumped 10.7 per cent.
Storage growth keeps outrunning DRAM, which makes sense given the amount of video, photos and other digital clutter users now generate.
Omdia senior research manager Jusy Hong said rising camera resolutions and user-generated content were pushing storage capacity growth well beyond DRAM growth.
In the first quarter, average smartphone capacity reached 8.3GB for DRAM and 279GB for NAND storage. That compares with 7.8GB of DRAM and 253GB of NAND in the same period last year, up 5.5 per cent and 10.1 per cent respectively.
The snag is that this growth is being driven by high-end devices. Low and mid-range smartphones are being squeezed, with memory capacities cut as vendors try to dodge the worst of the cost pain.
Average smartphone DRAM hit 8.3GB in the first quarter, up 0.5GB from the same period last year. It has climbed 3GB from the 5.3GB recorded four years earlier, in the first quarter of 2022.
Now the sums look uglier. Vendors are freezing memory in cheaper phones at previous-generation levels or dropping higher-capacity variants from product lines.
The result is grim for buyers spending less than $400. Omdia said average DRAM capacity in smartphones below that price fell compared with the previous year.
NAND storage is following the same pattern. The global average is still rising, but budget and mid-range tiers are going backwards once the numbers are split by price band.
As memory costs bite, vendors are shrinking budget portfolios and shifting their product mix towards higher-margin devices. Premium and high-end smartphones are still getting more memory, partly to satisfy buyer expectations and partly to justify fatter retail prices.
Hong said the polarisation of smartphone memory capacity would intensify this year, with higher-end devices gaining memory while budget models face cutbacks.
