Production of Affordable Smartphones May Decline!

According to a new Counterpoint Research report, production of smartphones priced below $200 could decline by 40% by 2030. This would mean around 230 million fewer devices worldwide. Experts point to growing demand for artificial intelligence as one of the main reasons for the decline. High demand for AI data centers is driving up the prices of components such as RAM and chips. This makes it more difficult to produce budget smartphones. Rising prices are encouraging consumers to use their existing devices for longer. As a result, smartphone replacement cycles are expected to become longer. Demand for refurbished and second-hand devices is also forecast to increase.

Counterpoint Research analyst Yang Wang says the overall market size may not change significantly, but the affordable smartphone segment is unlikely to return to its previous state. The decline in low-cost devices could create challenges for first-time internet users, particularly in low-income markets. Basic and second-hand smartphones could partially fill the gap. At the same time, growing interest in premium models could accelerate manufacturers’ shift toward higher-priced devices. This change appears increasingly difficult to avoid.