Counterpoint Research highlighted some smartphone manufacturers are downgrading components used in selected models to offset rising memory costs, as the analyst company became the latest to cut its forecast for 2026.

It noted the increased price of dynamic random access memory (DRAM) had upped the bill of manufacture for smartphones by around 25 per cent for low-end devices and 10 per cent for high-tier models since the beginning of the year.

Costs are expected to increase by another 10 per cent to 15 per cent in the first half of 2026.

Counterpoint Research senior analyst Shenghao Bai indicated some of those most affected were adopting strategies to mitigate these increases.

“In some models, we are seeing downgrades of components like camera modules and periscope solutions, displays, audio components and, of course, memory configurations,” he noted.

“Other tactics include reusing old components, streamlining the portfolio, and pushing consumers to higher-specification Pro variants and adopting new designs to stimulate upgrades.”

Decline
The comments came as Counterpoint Research joined fellow analyst house IDC in revising a previous prediction of growth in smartphone shipments in 2026 to a decline.

It expects a drop of 2.1 per cent year-on-year in 2026 compared with a previous expectation of a small rise.

Earlier this month IDC forecast a decline of almost 1 per cent in 2026.    

Counterpoint Research expects manufacturers in China to experience the greatest downturn in shipments, with the lowest-priced devices likely to be the hardest hit segment.

Average selling prices are expected to increase across the board.

Counterpoint Research senior analyst Yang Wang noted at the cheaper end of the market “steep price increases on smartphones are not sustainable” with manufacturers expected to “start pruning parts of their portfolios” as a result.

“Apple and Samsung are best positioned to weather the next few quarters,” Wang added. “But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins. We will see this play out especially with the Chinese OEMs as the year progresses.”