Buying a smartphone may get costlier in 2026 as brands cut back on budget models

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If you feel like smartphones are slowly getting more expensive and good budget options are becoming harder to find, you are not imagining it. A new report from Counterpoint Research suggests that 2026 could be a tough year for smartphone buyers, especially those shopping in the affordable and mid-range segments.

According to Counterpoint’s latest forecast, global smartphone shipments are expected to fall by 2.1 percent in 2026. In simple terms, this means fewer phones will be sold worldwide next year. The main reason behind this slowdown is rising component costs, which are making smartphones more expensive to manufacture and, eventually, more expensive to buy.

The biggest impact is being felt at the lower end of the market. Phones priced below $200 are taking the hardest hit. Counterpoint says the cost of making these devices has jumped by 20 to 30 percent since the beginning of this year. For brands, this leaves very little room to absorb costs without raising prices, something that budget buyers are often unwilling or unable to accept.

Even mid-range and premium smartphones are not immune. Their manufacturing costs have gone up by around 10 to 15 percent. A major contributor here is memory. With growing demand from AI and other advanced technologies, memory prices could rise another 40 percent by the second quarter of 2026. This alone could push overall phone production costs up by another 8 to 15 percent.

For consumers, this likely means two things. First, smartphone prices are expected to rise. Counterpoint now predicts that average selling prices will increase by nearly 7 percent in 2026, up from an earlier estimate of under 4 percent. Second, buyers may see fewer truly affordable models on the market. Analysts say sharp price hikes simply do not work well in the budget segment, so many phone makers are already cutting back on low-end models.

Chinese brands such as HONOR, OPPO and vivo are expected to be among the most affected. These companies rely heavily on value-driven devices, and rising costs make it harder for them to balance prices and profits. As a result, consumers may see fewer entry-level launches from these brands.

Some phone makers are responding by quietly changing what they offer. To manage costs, companies are downgrading certain components like camera modules, displays, audio parts and memory. Others are reusing older components, simplifying their product lineups, or nudging buyers toward higher-priced “Pro” models that offer better margins.

On the other hand, brands like Apple and Samsung are better positioned to ride out this phase. Their strong presence in the premium segment and tighter control over supply chains give them more flexibility.

For buyers, the takeaway is clear. Smartphones are getting costlier to make, budget options may shrink, and paying a little more for your next phone could soon become the new normal.