If you have been holding out for a budget-friendly upgrade in 2026, the latest industry signals suggest you might want to rethink that strategy. A perfect storm is brewing in the global supply chain, and it is set to reverse years of competitive pricing, forcing consumers to pay a premium for their next device. We might see a proper disturbance to the “flagship killer” and the ultra-cheap entry-level smartphone categories being replaced by a market defined by rising component costs and an aggressive push towards premiumisation.
Here is a deep dive into why smartphones are set to get pricier in 2026, supported by the latest data.
The “Supercycle” of Rising Costs
The primary driver of this price surge is a dramatic spike in the cost of memory chips. In 2025 alone, the price of DRAM memory chips surged by a staggering 187% year-on-year by September. This phenomenon, described by analysts as a “supercycle” in memory costs, is squeezing manufacturers who are now paying significantly more for the RAM and storage that goes into every device.
Samsung, the world’s largest memory maker, quietly raised prices on certain chips by up to 60% between September and November 2025. This isn’t just corporate greed; it is a supply bottleneck caused by the global AI boom. As cloud operators rush to build AI servers, memory suppliers like Samsung are shifting their factory output away from “commodity” mobile chips to high-bandwidth AI chips. The result? A shortage of the standard chips used in phones, leading to panic ordering and double-booking by manufacturers trying to secure stock.
But it is not just memory. The processors powering these devices are also becoming more expensive. TSMC has notified clients of an 8–10% price hike for its advanced 3nm and sub-5nm chips in 2026. Consequently, next-gen chipsets from Qualcomm and MediaTek are expected to cost 16% and 24% more, respectively, than their predecessors.
The Numbers: What This Means for Pricing
The trickle-down effect of these component costs is inevitable. Analysts estimate that the rise in memory prices alone will add 8–10% to unit production costs this year, with another 5–7% expected in 2026.
For the consumer, this translates to higher retail prices.
| Component / Metric | Projected Increase | Impact on Manufacturing |
| Mobile DRAM (RAM) | +75% YoY (Late 2025) | Major impact on Bill of Materials (BOM). |
| Flagship SoCs (Processors) | +16% to +24% | Driven by expensive 3nm/2nm fabrication costs. |
| Hardware Cost Impact | +$14 to +$70 | Manufacturers forced to hike retail prices (approx. KES 1,800 – KES 9,100). |
| Global ASP (Avg. Selling Price) | Hit ~$465 in 2026 | A record high for the industry, according to IDC data. |
Note: Currency conversions are estimates based on prevailing rates.
The “Premiumisation” Pivot
Chinese manufacturers, who have historically dominated the Kenyan market with value-for-money devices, are now pivoting strategies. Faced with rising costs, brands like Xiaomi, OPPO, and Vivo are leaning heavily into higher-priced “Pro” and “Premium” models where margins are safer.
Xiaomi President Lu Weibing has already warned that consumers should expect a “sizable rise in product retail prices” in 2026 due to these cost pressures. We have already seen this with the Redmi K90, which launched with a controversial price bump that the company attributed directly to memory costs.
Even budget-friendly giants like Transsion (the parent company of TECNO, Infinix, and itel) are signaling that price hikes are inevitable. The reality is that razor-thin margins in the budget sector are becoming increasingly difficult to defend.
Shrinkflation and The Death of the Budget Phone
The most critical impact for the average Kenyan consumer might not just be higher prices, but “shrinkflation.” To avoid alienating price-sensitive buyers, some manufacturers are expected to pare down specs or reduce production volumes for entry-level phones. This means we may see fewer ultra-cheap models on the market, or new “budget” phones that offer lower specs than their predecessors to maintain the same price point.
As Sigmaintell analyst Wang Xudong notes, brands are walking a tightrope between raising prices to maintain profit and cutting costs to stay competitive.
Techish Editor’s Take
The data is clear: 2026 will see smartphone prices at or near record highs. While manufacturers will market these price hikes as the cost of “AI innovation” and “advanced features”, the reality is largely supply-chain economics.
For the Kenyan buyer, this signals a shift. The days of upgrading your phone every two years for a slight spec bump at the same price are over or will take a pause for a while. If you are planning a purchase in 2026, be prepared to pay significantly more – roughly 5–10% extra – or look towards the second-hand market or older flagship models to get value for your money. The industry is banking on you paying the “AI premium,” but with stagnation in sales volumes predicted, it remains to be seen if consumers will bite.
