Global Smartphone Shipments Forecast to Plunge Amid Memory Chip Price Surge

Alanbatnews -

Global smartphone shipments are projected to experience a significant downturn, potentially reaching a more than decade low, according to a report. The anticipated slump is attributed to escalating memory chip prices, which are driving up the overall cost of devices.

Research firm IDC reported Thursday that worldwide smartphone shipments are expected to decline. The company's analysis points to a challenging landscape for manufacturers, particularly those focused on budget-friendly Android devices.

The report forecasts a 12.9% decrease in smartphone shipments, bringing the total down to 1.12 billion units. This contraction reflects a broader trend of rising component costs impacting the consumer electronics market.

Francisco Jeronimo, نائب رئيس قسم الأجهزة العالمية في آي دي سي , described the situation as more than a temporary setback. He characterized it as a "tsunami-like shock originating in the memory chip supply chain."

The rapid expansion of artificial intelligence infrastructure by major technology companies, including Meta, Google, and Microsoft, has absorbed a significant portion of the memory chip supply. This surge in demand has led to increased prices, as manufacturers prioritize higher-margin data center components over consumer devices.

Analysts predict that the elevated component costs will compel companies specializing in budget devices to pass on the expenses to consumers. This could further dampen demand in price-sensitive markets.

IDC anticipates the average selling price of smartphones to rise by 14% this year, reaching a record high of $523. This increase reflects manufacturers' shift towards higher-margin models to offset the escalating costs of components.