Affordable smartphones won’t disappear overnight, but the market segment that allowed you to buy a new phone for €100, €150, or €200 with reasonable specs is starting to shrink. The main reason isn’t cameras or screens, but two less visible components for consumers: RAM memory and storage.
The demand for artificial intelligence data centers is absorbing an increasing share of memory production. Manufacturers of DRAM and NAND have more incentives to fulfill orders for servers, AI accelerators, and cloud clients than to fight for minimal margins in entry-level mobile devices. This shift is already impacting costs and could completely change the lineup of budget smartphones during 2026 and 2027.
IDC forecasts that global smartphone shipments will decrease by 13.9% in 2026, reaching 1.09 billion units, marking the largest annual contraction of the market. The consulting firm also predicts another 1.1% decline in 2027 and a partial recovery in 2028, when memory supply begins to normalize.
The lower-end is the first to suffer
The problem with cheap phones is mathematical. In a high-end device, a rise in RAM or internal storage can be absorbed with margins, branding, financing, or final price adjustments. In an entry-level Android, each extra euro counts much more. If a manufacturer sells a phone for €120, a significant increase in memory costs can eat up a large portion of the profit margin or make the model unviable altogether.
TrendForce estimates that contractual prices for conventional DRAM will rise between 13% and 18% quarter-over-quarter in Q3 2026, while NAND Flash will increase between 10% and 15%. The firm also notes that consumer market clients, including PC and smartphones, are nearing their cost absorption limit.
This explains why pressure is concentrated on the cheapest models. A €100 phone cannot be increased by €30 or €40 without moving to a higher segment. Nor can they cut too much in memory without degrading user experience: Android, manufacturer overlays, social apps, cameras, and local AI functions now require more RAM and storage than in previous years.
Reuters reported IDC’s forecasts indicating a 14% rise in the average selling price of smartphones, reaching a record €523, as manufacturers shift towards more profitable segments. Apple and Samsung are better positioned due to their financial strength and higher share of premium segments.
Price comparison overview
Prices vary based on offers, storage options, sales channels, and country, but the current snapshot shows where the tension lies. Entry-level ranges still exist, though each increase in RAM or storage weighs more heavily on the final price.
| Segment | Current Examples | Approximate Price Range | Technological Insight |
|---|---|---|---|
| Basic Android Entry | Redmi A5, Galaxy A16 | €90-€130 | There are still cheap models, but with 3-4 GB of RAM and 64-128 GB of storage. Xiaomi Spain prices the Redmi A5 4 GB + 128 GB at €109.99, while the Galaxy A16 4G 128 GB is around €124-€130 in Spanish distributors. |
| Usable Low-End | OPPO A5x, OPPO A5m, OPPO A5 4G/5G, Moto G05 | €120-€200 | This is the most sensitive segment. It allows large batteries, decent screens, and 128 GB, but a memory cost increase can push these models into lower mid-range prices. The OPPO A5 family arrived in Spain priced between €129 and €199, depending on the version. |
| Affordable Mid-Range | Redmi Note, POCO X, Nothing/CMF, Motorola Edge | €230-€380 | Good value for money still exists here, but increased memory prices can reduce attractive offers. The POCO X7 Pro in European markets ranges roughly between €280 and €370, depending on version and retailer. |
| Established Mid-Range | Samsung Galaxy A56, Pixel «a» | €300-€550 | This is the new refuge for many users who previously bought low-end phones. The Galaxy A56 8 GB + 128 GB is listed from around €299 in Spain and about €350 at retailers like El Corte Inglés. |
| Entry iPhone | iPhone 16e | €540-€709 | Apple no longer competes in the true budget market. The iPhone 16e is officially priced from $599 in the US and launched in Spain starting at €709, though some comparisons list it below €600 depending on the store. | High-End | iPhone 16/17, Galaxy S, Pixel Pro | €800-€1,400 or more | This segment absorbs cost increases better. Apple lists the 128 GB iPhone 16 in Spain at €859, and Samsung has already increased prices in some markets with the Galaxy S26 generation. |
The table reveals an uncomfortable trend: cheap phones aren’t disappearing because there’s no demand, but because building a device with acceptable memory is increasingly costly. If manufacturers keep the price stable, they must cut features; if they keep specs, they must increase prices. If neither is feasible, they abandon the model.
AI also raises the minimum technical standards
Another less-discussed effect is that AI not only increases the memory demand on data centers; it also raises expectations within the phone itself. AI-powered editing, smart search, integrated assistants, translation, summarization, and local processing all require more RAM, more storage, and more powerful processors.
This puts the low-end segment in a contradiction. Users expect more features, but manufacturers have less margin to include sufficient memory. A phone with 3 or 4 GB of RAM can still serve for WhatsApp, calls, social media, and light browsing, but ages worse as the OS, apps, and AI layers demand more resources.
That’s why 2027 may mark a psychological boundary. Not necessarily the end of all cheap phones, but the end of the era when it was relatively easy to find new very affordable devices offering a decent experience for several years. Phones under €100 will be the first to be pushed aside. Then, the €120-€180 range, where Android sold millions of units in emerging markets and among users unwilling or unable to finance a flagship device, will also suffer.
Who wins and who loses
Apple and Samsung start with an advantage because they sell higher. They can secure supply, negotiate earlier, and pass part of the cost to the final price. They also have a user base more accustomed to paying €800, €1,000, or over €1,200 for a phone.
Volume-focused Android manufacturers face a bigger challenge. Xiaomi, OPPO, Vivo, Realme, Honor, Motorola, and Transsion have largely built their growth on value for money. If this ratio deteriorates, their catalogs will need to move upward or accept slimmer margins.
China might find some relief if suppliers like CXMT for DRAM or YMTC for NAND gain more local market share. That could benefit Chinese brands in certain markets but doesn’t fully relieve the global pressure or guarantee that Europe will see inexpensive phones with the same aggressive pricing as in previous years.
For users, the advice is straightforward: focus less on marketing claims and more on actual memory specs. In 2026 and 2027, avoid cheap phones with very little RAM, limited storage, or overly stripped-down base models. A device with 4 GB + 64 GB may be inexpensive to buy but short on lifespan. Often, paying a bit more for 6 or 8 GB of RAM and 128 or 256 GB of storage can extend the device’s usability.
The refurbished market will also grow. If new budget phones increase in price or cut specifications, many users will prefer higher mid-range or flagship models from previous generations over entry-level new models.
AI has already started raising costs for data centers, GPUs, and servers. Its next impact is felt directly by everyday tech consumers. Budget phones will still exist, but they may stop being so cheap. This difference is especially significant for those using a smartphone as a basic tool, more so than for those upgrading to flagship models annually.
Frequently Asked Questions
Will cheap smartphones disappear in 2027?
Not entirely, but models below €100 or €150 may decrease or come with more limited specs than in previous years.
Why does AI influence mobile pricing?
Because AI data centers consume large amounts of memory. Manufacturers prioritize DRAM, HBM, and NAND for servers, raising costs for components also used in smartphones.
What phone should I buy if prices go up?
To maximize lifespan, it’s advisable to prioritize models with at least 6–8 GB of RAM and 128–256 GB of storage, even if that means moving from entry-level to mid-range.
