A recent report from Counterpoint Research indicates that the surge in memory costs has put considerable pressure on the lower-tier smartphone market in the United States during the second quarter of 2026.
Smaller manufacturers faced particularly acute challenges, as established brands navigated these material cost hikes with more resilience. Below are the salient points.
Rising Memory Costs Hit Cheaper Smartphones Hardest
As detailed by Counterpoint Research, combined smartphone sales from major players such as Apple, Samsung, Motorola, and Google witnessed a year-over-year decline of 4% in Q2 2026.
Conversely, the broader market experienced a staggering 45% plunge, particularly impacting smaller manufacturers struggling under escalating component costs.
The report notes that sales of smartphones priced under $100 plummeted by nearly 65% compared to the same quarter the previous year.
This contraction inadvertently allowed Samsung and Motorola to expand their share in the prepaid smartphone market, as the increased component costs narrowed the competitive price gap with white-label devices.
In relation to Apple, the analysis posits that while the company has maintained stable pricing for its iPhones in the U.S., despite hikes for other product lines, there are anticipations of upcoming price increases for the iPhone 18 series. The announcement of some models is expected imminently.
From the report:
We expect smartphone Average Selling Prices (ASPs) to continue on an upward trajectory in Q3 2026, spurred by anticipated price hikes for Apple’s iPhone 18 series.
Historically, Apple represents over 50% of smartphone sales in the third quarter, thus pricing adjustments for flagship models will significantly influence overall ASPs.
The strength of sales prospects will hinge on carrier willingness to subsidize these devices. Additionally, Apple is likely to witness robust upgrade cycles, particularly among users transitioning from the iPhone 15 series.
If carriers maintain the capability to offer these new models at no cost, or close to it, despite pricing increases, sales will likely remain buoyant.
Recently, analyst Jeff Pu projected the price range for the iPhone 18 Pro to be between $1,349 and $1,399, while the iPhone 18 Pro Max may start at $1,449 and go up to $1,499.
Furthermore, several sources have suggested that the starting price for the iPhone Ultra might approach $2,500.
In its Q3 2026 earnings report, Apple disclosed a 22% increase in iPhone revenue, amounting to $54.2 billion.
However, the company also warned of impending memory cost escalations and supply chain constraints that are set to intensify in the September quarter, particularly affecting the iPhone, iPad, and Mac lines.
Source link: 9to5mac.com.
