Memory and CPU price inflation is emerging as one of the most disruptive forces in the European smartphone market in 2026, with direct implications for device pricing, portfolio strategy, and refurbished supply. Counterpoint analysis shows that memory, combining DRAM and NAND flash, has become the most volatile element in the smartphone Bill of Materials. Driven by an AI-led supply imbalance, memory prices have increased by around 140% compared with 2024 levels, far outpacing the roughly 23% rise seen in processors. In the market these two are often mixed up. SecondaryMarket.news already published earlier on this.
Low-end exposure intensifies
The sharpest impact is concentrated in the entry-level segment below approximately € 200, where margins are thin and competition is intense. For these devices, Counterpoint estimates an average BoM increase of € 18 per unit, pushing memory to as much as 34% of total manufacturing cost. This cost pressure leaves limited room for absorption, forcing brands to consider specification downgrades, reduced channel incentives, or selective market exits across Europe.
Mid-tier strategies evolve
In the mid-tier segment between roughly € 200 and € 550, average BoM inflation of € 21 is reshaping launch strategies. Memory now represents up to 20% of device cost, encouraging manufacturers to freeze specifications at 8 GB RAM and 128 GB storage, or to pass through price increases of up to 15%. Chinese OEMs with strong European exposure are feeling this pressure most acutely, particularly as consumers in this tier remain price sensitive.
Premium segment buffers costs
Premium devices above € 550 are comparatively insulated. Although absolute BoM increases can reach € 30 per unit, memory accounts for only around 12% to 14% of total cost due to expensive camera systems and displays. Scale advantages allow Apple iPhone, Samsung Mobile, and Google to negotiate more favourable supply contracts and absorb volatility without immediate structural change.
Market structure at risk
Brands concentrated almost exclusively in lower tiers, including realme, HMD, Transsion, Sony, and TCL, face disproportionate risk. With fewer levers to pull, some may struggle to maintain European relevance through the cycle. Industry sentiment suggests the market could emerge with fewer active players once memory pricing stabilizes.
Implications for recommerce
This shift significantly impacts the global secondary market. As rising storage costs drive up the price of new premium smartphones, budget-conscious consumers are increasingly turning to the secondary ecosystem. A recent Kantar study commissioned by Recommerce confirms this trend, noting that nearly 70% of used smartphone buyers prioritise affordability. The widening price gap between new and used devices positions the secondary market for accelerated growth. Consequently, higher memory pricing, stemming from structural, AI-driven shortages, may provide an unexpected but substantial boost to refurbishment and global circular tech adoption. However, this advantage is likely temporary. Increased demand for used devices will eventually push secondary prices upward. Furthermore, trade-in values will rise over the longer term, mirroring the inflationary trends of the primary market.
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