US budget smartphone sales drop 64% due to rising chip costs

Sales of smartphones priced under $100 in the United States dropped by 64% in the second quarter of 2026 compared to the previous year, according to Counterpoint Research. The overall market size for this segment decreased by approximately one-third.

The decline is primarily attributed to rising prices for memory and storage chips, which now constitute a larger portion of the total cost for entry-level devices. This has forced manufacturers to either increase retail prices or cease production of their most affordable models.

While overall smartphone sales in the U.S. fell by 5%, major brands including Apple, Samsung, Motorola, and Google saw only a 4% decline in cumulative sales. In contrast, smaller manufacturers and niche companies, which rely on low-margin, low-cost devices, saw sales plummet by 45%. This trend has already impacted companies like HMD, which reduced or withdrew its presence from the U.S. market due to low demand.