Over 40% of Smartphone Models Worldwide Raise Prices for the First Time This Year
According to Counterpoint statistics, over 40% of smartphone models globally have raised their retail prices since 2026, marking the first occurrence of this situation in the industry; the average price increase for sold models is about 15%, with some models nearly doubling in price, and new models are about 25% more expensive than corresponding models from last year. This is driven by rising costs of storage and other components, with manufacturers passing on the increased material costs to consumers.
The largest price increases are seen in price-sensitive markets: India 21%, Asia-Pacific 19%, Middle East and Africa 18%, Latin America 16%. China 10%, Europe 7%, and the U.S. 5%, with the latter markets seeing more price increases on new models rather than sold models. Low-end and mid-range models dominate shipments in markets like India, making it harder for manufacturers to absorb storage costs themselves. Manufacturers are also changing specifications: reducing storage capacity, simplifying cameras, and reverting to more 4G models in some tiers. The material cost increase for entry-level models is higher than for flagship models, with storage in low-priced models rising from below 20% to over 40% of material costs.
Storage contract prices have surged significantly due to competition for materials from AI data centers, with suppliers requiring smartphone manufacturers to queue behind large-scale cloud providers. The Google Pixel 11 series and Samsung Galaxy S26, S26+ have each increased prices by about $100 in the U.S. Shipments in India fell about 11% year-on-year in Q2, with the average price rising to about $315. While shipment volumes are under pressure, sales revenue may not necessarily decline simultaneously.
Buyers are low-end users caught between price increases and reduced specifications, while sellers are smartphone brands unable to compete for storage quotas with cloud providers. The driving force behind this situation is the rising storage prices rather than a one-time brand strategy. Beneficiaries include storage manufacturers and high-end model shares, while those under pressure are Android brands relying on volume sales of budget models.
Source: Public Information
ABAB AI Insight
For years, smartphone manufacturers have subsidized camera and screen costs with falling storage prices, but this subsidy chain has broken in 2026. Cloud providers are locking DRAM and HBM for training clusters, requiring smartphone orders to queue. Storage represents a higher proportion of material costs in low-end models, with the same chip price increase showing as 21% in India, while only reflecting as $100 and 5% average price in U.S. flagships. The simultaneous price increases across 40% of models indicate that this is not a trial by a single brand, but rather the entire industry is passing on unmanageable material costs.
Funds are flowing from consumer electronics material budgets to data centers. Manufacturers are reducing storage, cutting lenses, and reverting to 4G to maintain price tiers, effectively trading specifications backward for shelf space. A decline in shipments while sales revenue barely holds steady indicates that average prices are compensating for quantity. Apple and Samsung have long-term contracts and vertical integration, while small to medium Android brands can only follow price increases or exit the entry-level segment.
Comparable situations include the reduction of optional features in cars during the 2021 chip shortage and collective price increases by component manufacturers during the surge in photovoltaic silicon prices. The industry is currently in a cost impact phase of "AI competing for materials, smartphones making way," rather than a spontaneous upgrade cycle.
Structurally, this represents a transfer of pricing power. The mechanism is that once storage capacity is absorbed by higher-return cloud orders, smartphones are no longer the priority customers for storage manufacturers; those who can pass on price increases to consumers without collapsing sales will survive, while those relying on low prices for volume will be squeezed out by material bills.
ABAB News · Cognitive Law
Cloud providers lock storage, smartphone manufacturers can only lock retail prices
Low-end models are more vulnerable to price increases for the same memory chip
Declining shipments and rising average prices indicate that specifications are compensating for quantity