Global markets for smartphones, personal computers, and gaming consoles are facing contraction in 2026 as several prominent companies—including Britain’s Raspberry Pi and HP Inc—respond to escalating memory chip prices by increasing their product prices.
The rapid expansion of artificial intelligence (AI) infrastructure by major U.S. technology firms such as OpenAI, Google (operated by Alphabet), and Microsoft has absorbed a significant share of the world's available memory chips. This shift has led manufacturers to prioritize supplying higher-margin data center components over consumer device memory, resulting in rising semiconductor prices.
Leading memory chip producers Samsung, SK Hynix, and Micron recently reported strong quarterly earnings thanks to surging prices, though they acknowledge ongoing difficulties in meeting the heightened demand.
Despite this robust performance among chip makers, the ripple effects are substantially affecting consumer electronics sectors. Analysts from IDC and Counterpoint have both revised their forecasts, now projecting a decline in global smartphone shipments by at least 2% this year. This anticipated drop marks a sharp reversal from previous expectations of growth and would be the first annual decrease in smartphone sales since 2023.
IDC further estimates that the personal computer market will contract by no less than 4.9% in 2026, following an 8.1% expansion during the prior year. Concurrently, TrendForce predicts console sales will fall by 4.4%, after a 5.8% growth the previous year.
Within this environment, manufacturers are confronted with challenging pricing decisions. While some companies have already introduced price hikes, industry leaders such as Apple and Dell must decide whether to shoulder these increased costs internally, which would reduce profit margins, or transfer them to consumers, risking dampened demand.
Emarketer analyst Jacob Bourne highlights that although some of the cost increases might be absorbed by manufacturers, the scale of the shortage suggests consumers will experience higher prices. This situation is expected to lead to subdued sales of consumer devices throughout 2026, complicating efforts in an already inflationary market context.
Further intensifying these pressures are expectations that elevated memory prices will persist, potentially extending into the next year. Counterpoint projects memory prices to escalate another 40%-50% in the first quarter of 2026, on top of the 50% rise seen throughout the previous year.
Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide, remarked on observing "1,000% price inflation in some products over recent quarters," warning consumers that laptops, mobile phones, wearables, and gaming devices will soon carry significantly steeper price tags.
Analysts suggest that manufacturers specializing in low- to mid-tier devices may face the greatest challenges. Chinese firms like Xiaomi and TCL Technology, along with PC manufacturer Lenovo, are anticipated to feel the impact most acutely. TrendForce reported these companies had planned price increases up to 20% early in 2026. Market performance reflects these struggles, with shares of Raspberry Pi, Xiaomi, Dell, HP Inc, and Lenovo falling during the last quarter of 2025, Xiaomi experiencing the largest decline of 27.2%.
Executives have publicly acknowledged the pressures: HP’s CEO Enrique Lores announced in November plans to raise PC prices because of "significant" memory component costs, while Raspberry Pi's CEO described the cost surge as "painful" in a December blog post that also included device price increases.
The bearish demand projections may further hinder retail sales for electronics-focused outlets such as Best Buy, which had previously cautioned that tariff-related price increases could deter buyers.
Upcoming earnings reports from Apple (January 29), Dell (February 26), and Xiaomi (typically late March) will provide clearer insights into how these companies are managing the cost environment.
Apple’s substantial scale, strong pricing power, and extensive supplier network may position it better than smaller competitors to absorb or manage soaring memory chip prices. The company generally maintains stable pricing for its flagship iPhone range between launch events and has recently absorbed high tariff costs without passing them on to consumers.
Morningstar analyst William Kerwin notes that Apple's preference for contract pricing—rather than relying on more volatile spot pricing—helps secure better component prices. Nonetheless, he cautions that Apple is not immune to rising input costs and may eventually need to increase prices.