The US Budget Smartphone Market Is Shrinking Sharply

According to Counter Research, smartphone sales in the US fell by 5 percent year over year in the second quarter of 2026. The lowest-priced segment took the hardest hit: sales of devices priced below $100 plunged by 64 percent. This was reported by Ixbt.com.

Experts explain that manufacturers were forced to stop supplying such models or tried to raise their prices amid a sharp increase in RAM and storage costs. The main reason for the rising cost of memory components is that major cloud infrastructure operators are actively purchasing components for AI systems.

A Tough Test for Budget Gadget Makers

The situation has been particularly difficult for companies producing budget smartphones, as their profit margins are extremely low. In addition, rising fuel and everyday goods prices caused by conflicts in the Middle East put further pressure on consumer demand.

Against the backdrop of the overall market decline, sales of the four leading brands—Apple, Samsung, Motorola, and Google—fell by just 4 percent. Other smaller manufacturers lost 45 percent of their sales. Large companies are showing that their economies of scale allow them to purchase components on much more favorable terms.

Changes in the Market Structure

Amid the crisis, Samsung and Motorola managed to further strengthen their positions in the prepaid smartphone segment. Although sales of these devices in the US fell by 11 percent, the combined market share of the two brands increased.

At the same time, manufacturers are being forced to adapt to difficult conditions. Motorola, for example, raised the prices of some Moto G models, while Samsung increased the price of the Galaxy A17 smartphone by $50 in July. As a result, the segment for smartphones priced between $200 and $300 tripled its market share within a year.