{
  "id": 12123160,
  "title": "The AI boom is making the world’s cheapest smartphones disappear",
  "url": "https://urgent.news/2026/10/05/the-ai-boom-is-making-the-worlds-cheapest-smartphones-disappear",
  "topic": "tech",
  "section": "Tech",
  "published": "2026-10-05T10:00:43.000Z",
  "source": {
    "name": "Rest of World Tech",
    "slug": "rest-of-world-tech",
    "url": "https://restofworld.org/2026/ai-data-center-memory-chip-shortage-cheap-smartphones-digital-divide/"
  },
  "original_language": "en",
  "account": "The world's cheapest smartphones are vanishing due to AI infrastructure consuming the components. Global prices for existing models have risen by 15%, with new models costing about 25% more than last year. A global memory chip shortage, fueled by demand from AI data centers, is driving up the cost of smartphone manufacturing. Chinese smartphone manufacturers, known for affordable devices and accounting for 60% of global shipments, have cut back on their low-end projects this year as memory chip costs have surged. They are now focusing on more profitable premium devices. Smartphone price increases vary widely by region: India (+21%), Asia-Pacific (+19%), Middle East and Africa (+18%), while the U.S. has seen a mere 5% rise. This shift could impact more than just consumers seeking cheaper phones; it could widen the digital divide and hinder access to essential online services, potentially affecting the U.S. as more services move online. The GSMA warns that rising smartphone costs may affect the projected 800 million additional mobile internet users by 2030. By 2025, over a quarter of shipped smartphones worldwide cost less than $150, but this market is shrinking. Chinese manufacturers like Oppo, Vivo, and others, who built their businesses around affordable phones, are now prioritizing higher-margin products. In India, Xiaomi raised the price of a 128GB Redmi 15C from $140 to $190, a 36% increase. Oppo's sub-$100 phone shipments in Southeast Asia dropped 96%, while Vivo moved its main entry-level model above $100 in most markets. In Africa, sub-$100 phone shipments fell 34% year over year in the second quarter of 2026. The memory-chip shortage is expected to persist, as the three primary manufacturers shifted supply towards AI centers. Samsung Electronics, SK Hynix, and Micron Technology make up over 90% of the global memory chip market. With a $1.3 trillion capital expenditure forecast for U.S. AI firms in 2027, memory prices have been passed on to consumers. The disappearance of the cheapest smartphones is a significant issue for the world's poorest consumers, who face the highest price-to-income ratios for entry-level devices.",
  "summary": "AI data centers are driving demand for memory chips, pushing phone makers to raise prices and abandon some of their most affordable models.",
  "key_points": [
    "AI infrastructure driving up smartphone costs by 15-25%",
    "Chinese manufacturers shifting focus to premium devices",
    "Memory chip shortage expected to persist through 2027"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}