The next wave of smartphones and PCs will have less memory and fewer capabilities, yet are likely to cost consumers 14 percent more as AI ambitions eat all available memory supplies, according to researchers at IDC.<\/p>\n
IDC said that the worsening memory<\/a> market has caused its outlook to deteriorate just since December. The analysts are penciling in a decline in the PC market of 11.3 percent in 2026 \u2013 about 26 percent worse than they had guessed in December \u2013 and a decline in the smartphone market of 12.9 percent, which is more than double the 5.2 percent drop they predicted as a worst-case scenario just two months back.<\/p>\n \u201cThis is perhaps the biggest challenge the industry has faced since its inception,\u201d said Nabilia Popal, IDC\u2019s senior research director global consumer devices, during a roundtable video discussion posted Thursday. \u201cThis is not just a temporary situation. This is going to result in a structural reset of the entire industry, in terms of size, in terms of competitive landscape, of the product mix and also on the price.\u201d<\/p>\n To mitigate the cost and the short supply, IDC expects consumers to hang on to devices longer, or turn to used and refurbished units. Device makers meanwhile are likely to downgrade memory on their least expensive devices, optimize features around using less memory, or in some cases turn to Chinese suppliers that they’ve avoided over geopolitical or technical concerns.<\/p>\n \u201cAny meaningful impact is expected to take some time,\u201d Jeff Janukowicz, research vice president at IDC, said in a video posted Thursday. “So ultimately, from our perspective we continue to see a challenging environment in 2026. That\u2019s likely to push into 2027.\u201d<\/p>\n IDC is not alone in sounding the alarm. Researchers at Gartner this week<\/a> also said some types of memory have doubled or quadrupled in price since last year, and Gartner believes DRAM and NAND flash used in PCs and phones is set for a further 130 percent rise by the end of 2026.<\/p>\n Gartner is projecting a drop in PC shipments of more than 10 percent during 2026, and a decline of around 8 percent for smartphones, all due to the AI-driven memory shortage.<\/p>\n In the PC market, IDC expects the shortages to begin in the second quarter as smaller vendors struggle to obtain supplies unit volumes will \u201cfall off dramatically,\u201d researchers wrote.<\/p>\n During its earnings call on Thursday, Dell\u2019s chief operating officer and vice chairman Jeff Clarke<\/a> said DRAM prices over the last 6 months are up nearly 5.5x, at $2.39 a gigabit. Meanwhile the cost of NAND is $0.20 a gigabyte; that’s up nearly 4x over the last 6 months. He said that analysts are predicting prices in Q2 to be 20% to 50% higher.<\/p>\n In October, Dell reduced the price of PCs to win market share, then in January, the company increased the cost of PCs to adjust for higher memory prices. At the time, the OEM had tens of thousands of deals in the pipeline that had prices adjusted upwards, which immediately took pressure off Dell\u2019s margins, Clarke said.<\/p>\n \u201cIn PCs, we purposely delayed implementing that price move to stay in the hunt to take share and to drive growth, which will serve us for the long run,\u201d Clarke said. \u201cAnd then when we made the change on January 6, it wasn’t 90 days later, it was that day we stabilized margins,\u201d he said.<\/p>\n