Smartphone crisis: why phones under $100 have disappeared in the US and who won from it

The collapse of the budget segment: a 64% drop

The mobile device market in the United States has faced an unprecedented accessibility crisis. According to data from the analytics agency Counterpoint Research, published in August 2026, smartphone sales in the second quarter of this year fell by 5% compared to the same period in 2025. However, the overall figure hides a catastrophic situation in the lower price segment: sales of devices costing less than $100 plummeted by 64%. This means that the class of "budget phones," which was previously the backbone of the market for millions of users seeking affordable communication solutions, has practically disappeared.

The memory paradox: AI vs. mass market

The main cause of the collapse of the budget segment was the shortage and sharp rise in the cost of memory components. Manufacturers were forced to either completely stop supplying models cheaper than $100 or significantly raise their prices. Experts link this price surge to the active development of artificial intelligence. Major cloud infrastructure operators, such as Amazon, Microsoft, and Google, launched large-scale purchases of RAM and storage chips in 2026 for training and maintaining their neural networks. In conditions of shortage, priority was given to corporations with deep pockets, leading to smartphone manufacturers having to overpay for components, which made the production of cheap phones economically unviable.

War of the giants: who survived and who disappeared

The crisis revealed a clear skew towards market monopolization. The figures for the four leading brands — Apple, Samsung, Motorola, and Google — fell by only 4%, which is a minimal decline. Large companies demonstrated the advantage of scale, allowing them to purchase components on much more favorable terms and cover costs through the margin of flagship models. At the same time, other small manufacturers lost 45% of their sales, unable to compete in the price war. The market consolidated around a few players capable of dictating terms to suppliers.

Price shift: the triumph of the middle class

In response to the rising cost of components, manufacturers began an aggressive strategy of price revision. Motorola increased the price of several Moto G series models, and Samsung increased the price of the popular Galaxy A17 smartphone by $50 in July 2026. These measures led to an interesting market phenomenon: the segment of smartphones costing between $200 and $300 managed to triple its market share in a year. Consumers who previously bought phones for $100 were forced to overpay, moving into the mid-range price segment. This suggests that the era of ultra-cheap smartphones in the US has, for all intents and purposes, come to an end.