The affordable smartphone market is expected to face significant declines due to the rapid expansion of artificial intelligence (AI). A study by Counterpoint Research forecasts that the global market for smartphones priced under USD 200 could shrink by 40% by 2030, equating to a reduction of around 230 million devices annually.
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This anticipated decline is largely driven by the surge in AI data center development, which has led to increased costs for essential components such as RAM and system-on-chips (SoCs). As these costs rise, producing entry-level devices is becoming less appealing for manufacturers. In response, the mobile industry is shifting focus from budget models to higher-margin mid-range and premium smartphones.
Consumers might adapt by extending the lifespan of their current devices or exploring the growing market for refurbished phones. However, the decreasing availability of budget smartphones poses a significant risk for global connectivity, particularly for first-time users in lower-income regions who may be locked out of mobile internet access. Yang Wang, a principal analyst at Counterpoint Research, emphasizes that the reduction in affordable devices could have serious implications for connectivity in these areas.
While the overall smartphone market is expected to rebound in volume by the end of the decade, its makeup will likely change permanently. The enduring demand for high-end devices indicates that budget phones priced under USD 200 may soon become obsolete.