# AI's memory appetite is killing the sub-$100 phone | QANATONE

> Memory makers shifted capacity to AI data centers. Shipments of phones under $100 fell almost 60% in the second quarter, hitting developing…

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# AI's memory appetite is killing the sub-$100 phone

6 Oct 2026 3 min read News · Infrastructure

Memory makers shifted capacity to AI data centers. Shipments of phones under $100 fell almost 60% in the second quarter, hitting developing markets hardest.

## What happened

An analysis by Rest of World finds the world's cheapest smartphones are disappearing because AI infrastructure is absorbing their components. Samsung, SK Hynix and Micron shifted most supply toward AI data centers from late 2025, memory prices rose, and the cost hit low-margin entry phones hardest. Shipments of phones under $100 fell almost 60% year on year in Q2 2026.

## The numbers

Oppo's sub-$100 shipments in Southeast Asia fell 96%, and Vivo moved its main entry model above $100 in most markets. In Africa, where 81% of phones shipped last year cost under $200, sub-$100 shipments fell 34%. Memory is now nearly 60% of the bill of materials in sub-$200 phones, and new models cost around 25% more.

**60%** year-on-year drop in sub-$100 phone shipments, Q2 2026

## Why it may not return

Analysts say the 171-million-unit sub-$100 segment could stay uneconomical even if memory prices stabilize by mid-2027, with prices expected to rise until at least 2028. IDC forecasts a record 16.7% drop in global smartphone shipments in 2026.

## Who it affects

An entry phone now costs about 44% of monthly income for the poorest 20%, raising the price of getting online as banking, commerce and public services move to phones.

## Why memory matters

AI servers consume fast HBM and ordinary DRAM. HBM yields fewer bits per wafer, so as makers shift to it, supply of the memory used in phones shrinks. AI buyers pay more and commit long term; phone makers either raise prices or cut memory, and at the entry level many simply exit.

## What it means for Turkey

Phone prices in Turkey are already high because of the currency and taxes, so rising global memory costs will add pressure to entry and mid-range models. Longer replacement cycles and a bigger second-hand market are likely, meaning sites must work on older devices.

## What it means for your business

Many users will stay on older, weaker phones for years. Test your site on mid-range devices, budget page weight, and favor fast web pages over apps that need storage.

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