The IDC report raises concerns. This is the end of the era of cheap smartphones

This is the lowest level of supplies in over a decade. Thus, this market will fall below the 2016 level. Even during the pandemic, no such problems were reported. This is said to be due to shortages of DRAM and NAND chips. As Francisco Jeronimo, Global Vice President of Client Devices at IDC, highlighted:

What we are witnessing is not a momentary squeeze, but a tsunami-like shock that originates in the memory supply chain and will ripple through the entire consumer electronics industry.

The shortages are expected to hit mainly the lower segment of the market. First of all, due to the increase in module prices, it will be necessary to pass on these costs to the end customer. However, the issue of the shortages themselves cannot be ignored. Since the availability of memory modules is very limited, it is a much better idea to produce mid- and high-priced devices based on them.

IDC also makes a similar assumption. The report predicts that the average price of smartphones will increase by 14% this year. The bittersweet conclusion is that prices are expected to stabilize in 2027. This is only apparently good news, because stabilization means no further sudden increases. However, there is no question of returning to pre-2025 prices. As highlighted by Nabila Popal, Senior Research Director at IDC Worldwide Quarterly Mobile Phone Tracker:

Although memory prices are expected to stabilize by mid-2027, they are unlikely to return to previous levels – making the sub-$100 segment permanently uneconomical. In short, there is no return to business as usual for suppliers and consumers.