The AI Boom Is Making the World’s Cheapest Smartphones Disappear

Summary

The world’s cheapest smartphones are becoming harder to find as AI data centers absorb memory-chip supply and increase the cost of making consumer devices. Existing smartphone prices have risen about 15% globally this year, while newly launched models are about 25% more expensive than last year; increases are sharper in India, Asia-Pacific, and the Middle East and Africa than in the U.S. Chinese manufacturers, which account for roughly 60% of global smartphone shipments, are reducing entry-level projects and prioritizing more profitable premium phones. More than one in four smartphones shipped globally in 2025 cost less than $150, but that segment is shrinking. Xiaomi raised the launch price of a 128GB Redmi 15C in India by 36%, Oppo’s shipments of phones below $100 in Southeast Asia fell 96%, and Vivo moved its main entry-level model above $100 in most markets. In Africa, where 81% of phones shipped last year cost less than $200, sub-$100 shipments declined 34% year over year in the second quarter of 2026; globally, such shipments fell almost 60%. Analysts say the shortage may not ease soon because Samsung Electronics, SK Hynix, and Micron, which together control more than 90% of the memory market, redirected most supply toward AI centers in late 2025. The article says prices below $150 could become prices below $250 or even $300, with costs unlikely to return to pre-2025 levels. That shift could widen the digital divide: an entry-level phone already represents 44% of monthly income for the poorest 20% globally and 76% in sub-Saharan Africa. People may delay replacement, share devices, keep using feature phones, or go offline, potentially undermining expectations that nearly 800 million additional people will use mobile internet by 2030.