Budget phones are about to get a lot more expensive

The budget smartphone market is under real pressure this year, and the cause isn't demand, it's memory. Analysts now expect sales of lower-tier phones to drop by around 22% in 2026 as the price of the RAM and storage chips inside them keeps climbing.

Memory has historically been a modest slice of what a budget phone costs to build. That's changed fast. Industry estimates now put memory at up to 64% of the total component cost on the cheapest handsets, a level that leaves phone makers with very little room to hold prices steady without cutting elsewhere, on cameras, battery capacity or build quality.

It's the same shortage showing up at the premium end too, visible this week in the $1,699-plus price tag on MSI's new handheld gaming PC. Budget phones are simply where it's most painful, because the margins were already thin.

Should you care?

If you've been putting off a sub-£200 phone upgrade waiting for prices to soften, the evidence right now points the other way. This looks like a year to buy sooner rather than later if a budget device is what you need, rather than waiting for a discount that may not come.