AI growth could lead to a massive drop in cheap smartphone sales

Counterpoint Research predicts a major contraction in the low-cost smartphone sector driven by the rapid expansion of artificial intelligence. Between 2025 and 2030, shipments of devices priced under $200 are expected to drop by approximately 40 percent. This shift could result in the removal of more than 230 million annual units from the global market by the end of the decade.

According to principal analyst Yang Wang, this decline stems from escalating chipset and memory expenses alongside higher hardware requirements for modern software. Because component costs represent a larger portion of the total manufacturing budget for entry-level models, producers are less able to offset price hikes and are increasingly abandoning unprofitable product lines. While the broader mobile industry is projected to recover its total volume by 2030, the market is pivoting toward higher-specification mainstream and premium devices rather than returning to its previous reliance on affordable hardware.