Smartphones costing less than $100 may disappear from sale
Artificial intelligence is partly to blame.
Xiaomi phones. Illustrative photo: Xiaomi
Smartphones cheaper than $100 may soon disappear as memory costs rapidly rise, CNBC reports.
About 173 million smartphones costing less than $100 were shipped worldwide last year. In the second quarter of 2026, shipments in this segment fell by almost 60% compared to the previous year, according to IDC data.
Phones costing up to $100 accounted for 27.7% of Chinese company Xiaomi's global shipments in the first half of 2025. A year later, this share dropped to 11.2%.
Partly to blame is artificial intelligence's insatiable appetite for memory. Chip manufacturers have prioritized more expensive products used in AI infrastructure, leading to a reduction in component supplies for smartphones and an increase in costs.
Memory now accounts for almost 60% of the bill of materials for smartphones costing below $200, says Shou Shen Winnie of Omdia.
"Producing budget phones is becoming economically unviable," said Bryan Ma, IDC's Vice President of Client Devices Research.
In an effort to boost margins, Chinese manufacturers are moving into higher price segments. As the production of the cheapest models becomes unprofitable, manufacturers are removing them from their lineups, pulling the overall market upwards.
Xiaomi's share of shipments costing up to $200 fell from 60% to 52.5% since 2023, according to IDC data.