Memory shortage hits the budget market: Why are smartphones under $100 disappearing from the market?

The US market for the most affordable smartphones is shrinking rapidly. According to Counterpoint Research, sales of devices costing less than $100 in the second quarter of 2026 fell by 64% year‑on‑year. Manufacturers are either raising prices or discontinuing their cheapest models altogether.

Who has lost the most

Overall, the US smartphone market shrank by 5% in the quarter. However, the heaviest losses did not fall on the biggest brands. Apple, Samsung, Motorola and Google together saw sales fall by around 4%, while other manufacturers lost 45% of their sales. Smaller companies, which relied mainly on low‑cost devices, were particularly hard hit.

The prepaid smartphone segment also declined – by 11%. At the same time, Samsung and Motorola strengthened their positions. Samsung’s share rose to 47%, while Motorola’s reached 32%. Carriers are increasingly favouring the Galaxy A and Moto G lines, as there are noticeably fewer options in the lowest price segment.

Why this is happening

Analysts point to a sharp rise in the cost of DRAM and flash memory as the main reason. In low‑cost smartphones, these components make up a significant share of production costs, making it increasingly difficult for manufacturers to keep prices down. Additional pressure comes from tariff uncertainty and problems in the prepaid market, which have already prompted some brands to scale back their presence in the US.

As a result, the cheapest models are gradually disappearing from shelves, and choice is shifting towards better‑known manufacturers. Some budget models have been moved into higher price brackets: sales of smartphones in the $200–$299 range nearly tripled year‑on‑year.

In brief

Sales of smartphones under $100 in the US have plunged by 64% over the year, driven by rising memory costs. Smaller manufacturers lost almost half of their volumes, while Samsung and Motorola strengthened their positions. Carriers are increasingly offering Galaxy A and Moto G models, and the cheapest devices are disappearing from the market en masse.