People planning to buy a new smartphone may face a major shock in the coming year. Industry experts say smartphone prices are set to rise sharply in 2026, making upgrades more expensive for consumers.
According to market estimates, smartphone prices may increase by around 6.9 to 7 percent next year. Experts attribute this hike to rising production costs, chip shortages, and the growing demand for AI data centers.
AI Boom Triggers Chip Shortage
The rapid expansion of AI data centers worldwide has increased demand for memory chips. As a result, manufacturers are facing shortages of critical components. This shortage has pushed up chip prices and raised smartphone manufacturing costs.
Market analysts warn that memory chip prices could rise by up to 40 percent by mid-2026. Since smartphones rely heavily on these chips, brands may pass the increased costs on to consumers.
Higher Manufacturing Costs Add Pressure
Smartphone makers are already dealing with rising expenses. This year alone, the material cost of budget smartphones priced below $200 increased by 20 to 30 percent. Meanwhile, mid-range and premium phones saw cost hikes of 10 to 15 percent.
Experts expect production costs to rise further. During the first half of 2026, manufacturing expenses could increase by another 8 to 15 percent, adding more pressure on prices.
Shipments May Decline
Due to higher prices, global smartphone shipments may drop by 2.1 percent in 2026, according to industry estimates. Analysts believe many consumers may delay upgrades as devices become costlier.
Overall, rising chip prices, AI-driven demand, and higher production costs point toward more expensive smartphones in 2026, making it harder for buyers to find affordable options.
