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looorg [soylentnews.org] writes:

No more cheap phones. We can all guess the reason. It's good old AI again, the gift that keeps on giving. The market for cheap chips is shifting due to AI datacenter demands. So to enjoy your future AI fun you now need to get a better, ie more expensive, phone.

It is possibly not a large market segment in Europe and the USA. Unless you are seriously into burner phones for one reason or another. But for the rest of the world the "cheap" phone is a substantial market.

The AI boom is making the world’s cheapest smartphones disappear
AI data centers are driving demand for memory chips, pushing phone makers to raise prices and abandon some of their most affordable models.

The world’s cheapest smartphones are disappearing because AI infrastructure is absorbing the components.

Prices of existing smartphone models have risen by about 15% globally this year, while newly launched models are roughly 25% more expensive than last year. A global memory chip shortage, driven by demand from AI data centers, is pushing up the cost of making smartphones.

For the world’s poorest consumers, the problem is not simply that smartphones are getting more expensive. It’s that the cheapest phones are disappearing.

When smartphones remain available but become unaffordable, consumers make difficult sacrifices to keep themselves online. They might delay upgrading, borrow or share their devices, remain on older feature phones, or go offline when they are unable to replace a device that is no longer working or stolen. Often, it means they won’t have an internet-enabled device at all

https://restofworld.org/2026/ai-data-center-memory-chip-shortage-cheap-smartphones-digital-divide/ [restofworld.org]

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