The end of cheap phones? How the AI revolution will make your next mobile more expensive

A report by Counterpoint Research warns that the AI revolution is driving up component costs and threatens to eliminate affordable devices from the market. The budget smartphone market is expected to shrink by 40% by 2030, with over 230 million devices disappearing annually. Consumers will be forced to hold onto older devices, the used phone market will thrive, and mid-range device prices will rise.

A new report by research firm Counterpoint Research warns that the AI revolution is expected to significantly increase the cost of smartphones and eliminate affordable devices. The main reason is the massive demand for chips, processors, and memory components for AI servers, which drives up component prices and reduces the profitability of manufacturing cheap devices. According to forecasts, the budget smartphone market (under $200) is expected to shrink by 40% by 2030, with over 230 million devices disappearing from shelves annually. Consumers are expected to hold onto existing devices for longer periods, the used and refurbished phone market will flourish, and demand for device insurance will rise. Those who want a new device will need to invest more in a mid-range phone. The impact will be particularly severe for low-income consumers and in developing countries.