Cheap smartphones could soon be a thing of the past, as AI boom snaps up chips — more than 230 million devices a year could be gone by the end of the decade
Phones are likely to be more expensive in the future, as rising memory and chipset costs look set to consign budget smartphones to history
A recent report predicts a significant drop in the production of budget smartphones by 2030, potentially reducing the market by 40%. The primary factors contributing to this decline are the rising costs of RAM and chipsets due to the AI data center boom. As minimum spec phones become less profitable, consumers with limited incomes, especially in poorer countries, may find internet access increasingly unattainable.
Counterpoint Research, the forecasting agency, estimates that smartphones priced below $200 could shrink by 230 million units, marking a significant contraction in the market. Despite this, mid-range, premium, and ultra-premium devices are expected to remain less affected.
The study suggests a shift in consumer behavior, with many people likely to keep their devices for longer periods. This change could lead to an increase in the refurbished handset market and longer insurance plans for legacy stock supplies. Additionally, the higher demand for premium smartphones may further support the development of dumbphones and niche/DIY solutions.
While budget phones may not disappear entirely, their affordability and availability could be significantly impacted. Yang Wang, a principal analyst at Counterpoint Research, notes that the market will recover in unit terms but the affordable segment will not regain its previous standing. Instead, the focus will shift towards better-specced mainstream devices and premium products, with limited absorption of the lost volume by higher tiers.
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