Smartphone market: Budget segment under $200 to shrink 40% by 2030

The global market for budget smartphones priced under $200 is projected to shrink by approximately 40% by 2030, according to analysis from Counterpoint Research. This contraction represents a loss of more than 230 million units annually.

The primary driver for this shift is the rapid increase in the cost of essential components, specifically memory chips. The boom in AI data center construction has created massive demand for high-performance DRAM and NAND flash memory, leading manufacturers to prioritize more profitable server chips over consumer electronics.

Industry analysts suggest that memory costs could account for 70% to 80% of the total production cost of a low-end smartphone or notebook. For example, the cost of a 12 GB RAM and 256 GB storage combination has reportedly risen from roughly $70 to $310, making it difficult for manufacturers to maintain profitable margins on devices priced below $200.

While the entry-level segment declines, the market for smartphones priced above $200 is expected to grow by about 26% by 2030. The total global smartphone market is forecasted to reach approximately 1.2 billion units annually by the end of the decade.