If you’re holding onto your phone despite a wave of new, high-powered options, you’re not alone. At the lowest mark since 2012, smartphone shipments worldwide continued a months-long slide, dropping 20% in the third quarter of 2026 due to the RAMageddon memory shortage, according to a new analysis by Counterpoint Research.
Counterpoint said the cost of DRAM and NAND — the two main memory chips used in smartphones, computers and data centers — continues to rise, forcing manufacturers to raise phone prices, which are up a total of 20% this year. Memory costs more because there’s less of it to go around, thanks to the massive AI infrastructure build-out and its voracious appetite for chips.
It was the second consecutive quarter to “take the full brunt of the memory crisis,” Shilpi Jain, senior analyst at Counterpoint, said in a statement Monday.
Research firm Gartner estimated that companies will spend $1.4 trillion on AI infrastructure this year and $2.6 trillion overall. More than 70% of global memory chip production will go to AI investment, TrendForce said. Global fears about rising inflation for most products and services are also suppressing phone sales.
Some manufacturers fared well in the third quarter, according to Counterpoint. Samsung’s market share was 23%, up from 19% in 2025, thanks in part to “robust initial demand” for the Galaxy Fold 8. Apple’s third-quarter market share was 22%, the first time the company surpassed 20% in that three-month period. But both companies saw a year-over-year decline in shipments.
Things don’t look rosy for customers’ wallets either. Earlier this month, Samsung raised prices by $100 for its Galaxy S26 phones, and Apple’s new iPhone 18 Pro and Pro Max launched last month with prices $100 higher than the previous generation.
How do consumers react?
The third quarter saw a number of notable smartphone introductions, including Samsung’s Galaxy Z Fold 8 and Galaxy Z Flip 8, the Google Pixel 11 and, in the waning days of the period, the iPhone 18 Pro line and Apple’s first foldable, the $1,999 iPhone Duo. Pre-orders for the iPhone Duo begin on Friday.
Shoppers will be wary of buying the latest and greatest smartphones because of higher prices, says TMT analyst Paolo Pescatore.
“New design features, including foldables, may generate excitement and appeal, but their steep price points remain hard to justify when most people want a device that delivers robust, reliable connectivity,” Pescatore told CNET via email. “For many, the question is simple: Why replace a perfectly functioning smartphone that meets their daily needs?”
Counterpoint Research found in a recent survey that half of respondents – spanning the US, UK, India, China and Germany – will wait until the holiday sales to buy a new phone. This number rises to 56% among Gen Z consumers. Counterpoint’s Jain said consumers are increasingly looking for “refurbished devices and prioritizing higher-end devices.”
With sales down, phone makers can resort to different strategies for customers, including refurbished phones, repairs and exchange schemes, Pescatore said. Cell phone carriers such as T-Mobile, Verizon Wireless and AT&T could also use financing plans and bundled services as enticements.
As AI investment continues to drive up memory supply, phone prices aren’t going to drop anytime soon. And with companies focusing more on premium devices, there may be fewer budget alternatives available to customers, Counterpoint Research said.