The memory crisis is killing off sub-$100 smartphones as US sales plunge 64%

By the second quarter of 2026, sales of smartphones priced under $100 in the United States have plummeted by 64%, a worrying trend with no apparent end in sight. Counterpoint Research attributes this decline to the rising costs of memory, driven by increased demand from hyperscalers and other macroeconomic factors. These memory price hikes, coupled with higher prices for other goods resulting from the Middle East conflict, have significantly reduced consumers' purchasing power and consequently, demand for these affordable devices.

The impact is particularly severe for smaller brands, many of which have exited or downsized their presence in the US market. As a result, sub-$100 smartphone sales have plummeted, with OEMs either discontinuing these devices or raising prices to cover the increased memory costs. Carrier-branded white-label phones have been among the hardest hit.

The growing disparity between these budget devices and entry-level offerings from major manufacturers like Samsung and Motorola has further diminished the appeal of lesser-known alternatives. The price pressure on Motorola's G-series phones has seen them shift into the previously uncommon $200-$299 price range, leading to a surge in sales by nearly 200% year-over-year and tripling their market share.

However, this downward spiral is expected to persist, with Counterpoint forecasting a continued rise in average smartphone selling prices in Q3, coinciding with Apple's anticipated price hikes for its upcoming iPhone 18 series. Apple CEO Tim Cook has confirmed that price increases across Apple's product lineup are becoming necessary, even hinting at potential increases surpassing $200.

This budget smartphone crisis is not isolated, as Gartner had previously predicted the potential disappearance of the sub-$500 PC market by 2028 due to memory and NAND cost escalations. Recent reports also suggest that global sales of smartphones under $400 are projected to decline by 22% this year, with memory accounting for nearly 60% of the bill of materials for these devices.