Android phones are about to get more expensive next year

Despite inflationary pressures and tariffs, most Android phones launched this year managed to avoid a price hike.

That might not seem like a big deal, but it required a lot of planning and tweaking from companies to keep prices flat while absorbing higher component costs.

However, that grace period will almost certainly end in 2026.

The AI boom is eating into the world’s DRAM and NAND supply

It’s all about demand, supply, and profit margins

All major tech giants and their associated supply-chain partners are in a race to build as many data centers as possible for AI inference training and processing.

The global AI boom is putting a huge strain on the supply of many shared components, such as memory and storage.

Google, Meta, Amazon, Nvidia, OpenAI, and others are devouring memory for their data centers.

And when hyperscalers buy tens of millions of chips at a time, the less-profitable consumer tech and smartphone segment becomes a second priority.

Samsung, SK Hynix, Micron, and others — the top DRAM and NAND suppliers for smartphones, tablets, and other devices — are directing their resources towards the high-margin enterprise market for AI servers.

That means fewer units for consumer electronics, driving up prices across the board.

This has a ripple effect that will affect almost every consumer electronic device, including PCs, smartphones, tablets, and even TVs.

It’s not just about a couple of extra dollars; DRAM prices have skyrocketed by almost 70% to 80%. A Chosun Biz report points to a whopping 170% increase in some cases.

Typically, DRAM and storage chips contribute about 10% to 15% of a phone’s total Bill of Materials.

That might not sound like much, but when their prices more than double or triple within a few months, it puts a strain on manufacturers and their profit margins.

This leaves them with two options: either cut corners in other areas or increase prices.

With intense competition, cutting corners across multiple aspects, like the battery, display, or charging speed, is not always a viable option. And even this can only work to a certain extent.

That’s what most smartphone makers did this year to absorb the rising component costs. But the rise in DRAM and NAND prices is now too steep to avoid a price hike.

AI features demand more RAM

All while tightening the global RAM supply

As memory is becoming more expensive and harder to source, its importance is also increasing in flagship smartphones.

While companies could get by with equipping their phones with 12GB RAM a few years ago, that will not work now.

On-device AI models, such as Gemini Nano, require a significant amount of RAM and high-speed storage to run locally on phones.

As AI workloads grow, phones will need more memory headroom to run larger, more capable models locally.

With flagship Android smartphones coming with seven years of OS updates, OEMs need to equip them with sufficient RAM for future-proofing.

A phone that ships with barely enough RAM today will struggle a few years down the line to run more complex AI models. For long-term support, they must ship with more RAM.

Even APs are getting expensive

Flagship chips come at a steep cost

It’s not just DRAM and NAND that are getting expensive. Application processors (AP), the heart of a phone, are also getting expensive.

Previous reports indicate Qualcomm has hiked the price of its newest flagship chipset — the Snapdragon 8 Elite Gen 5, which will power most Android flagships in 2026 — by 20%. That’s on top of Snapdragon 8 Elite already being more expensive than its predecessor.

Due to this price increase, some companies will pay Qualcomm as much as $190 for its newest Snapdragon chip.

The ripple effect will hit every device category

From PCs to TVs, everyone pays the price

It’s not just the smartphone industry feeling the squeeze from skyrocketing DRAM and storage prices. The consumer PC segment is being hit even harder.

Major OEMs like Dell and Lenovo are all reportedly on the verge of hiking their PC prices by 15% to 20%, as component costs continue to soar. And this could be one of the many price hikes to come in the next few months.

RAM prices have increased drastically. A quick check on Amazon shows 2x8GB DDR4 sticks retailing for $105, increasing by more than 50% in the last few months. And that’s for the older DDR4 memory; prices for newer DDR5 modules have risen even faster.

The RAM shortage has already led to the affordable Raspberry Pi becoming more expensive by $5 to $25. That’s just the beginning.

Gaming consoles, TVs, and almost every other consumer electronic device that uses DRAM and NAND will most likely get a price hike next year.

One way or another, you’re paying more

Even if Samsung and other top-tier Android makers manage to keep their flagship phone prices steady, they’ll almost certainly make up the difference elsewhere.

Trade-ins, carrier deals, and launch promos will likely become less generous.

Mid-range models, which operate on razor-thin margins, are expected to see a price increase. If not, their yearly upgrades might be far more modest or almost negligible.

Rumors point to the Samsung Galaxy S26 packing the camera setup as the S25 for cost reasons, while the Google Pixel 10a appears set to be a rebadged Pixel 9a.