A report from Counterpoint Research indicates that the production of budget smartphones, specifically those priced below $200, could decrease by 40% by 2030. This anticipated decline translates to a reduction of approximately 230 million devices in the market. The rising costs of RAM, chipsets, and other components, driven by the booming demand for artificial intelligence data centers, are significant contributors to this trend.
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The research suggests that as higher device specifications become necessary to justify increased pricing, lower-end smartphones are less profitable and increasingly overlooked. The shift signals a potential challenge for consumers in poorer regions, where affordable devices are crucial for accessing mobile internet.
The report points to a larger structural change within the smartphone market, where mid-range, premium, and ultra-premium devices may continue to thrive, while the affordable segment struggles. Consumers might hold onto their existing phones longer due to the rising costs, leading to extended replacement cycles and potentially bolstering the refurbished phone market.
Yang Wang, a principal analyst at Counterpoint Research, noted that while the overall smartphone market is expected to recover to its 2025 volume by 2030, the budget segment will likely remain diminished. He emphasized the connectivity risks associated with this decline, as reduced availability of affordable smartphones could hinder internet access for first-time users in lower-income markets. There may also be new opportunities in the used phone market, as well as for niche or DIY solutions, as consumers adapt to the changing landscape.