The surge in AI capabilities is reshaping the smartphone landscape—but not always in a way that benefits consumers. While cutting-edge AI features demand more powerful hardware, the resulting spike in component costs is forcing manufacturers to make tough choices. Prices are climbing, and traditional hardware features like cameras and batteries are taking a backseat, leaving buyers to wonder if their next flagship phone will truly deliver value.
The Rising “AI Premium” on Smartphone Components
A recent industry report highlights that smartphone prices are set to see their most significant rise in over two decades—not due to inflation or logistics, but an acute shortage of RAM triggered by AI’s hardware demands. For example, Samsung’s upcoming Galaxy S26 may face a steep price increase that risks pushing it out of many buyers’ budgets. To compensate, rumors suggest that Samsung might reduce camera enhancements to offset the growing cost of memory modules, showing just how acute the hardware trade-offs have become.
Manufacturers are caught in a bind: AI-powered on-device features require more RAM, which is currently the highest-priced component in the bill of materials. This squeeze makes it difficult to innovate without inflating prices or cutting back on beloved physical features.
“Tech Shrinkflation” and Why It Concerns Consumers
Historically, each new smartphone generation offered better chipsets, improved screens, and upgraded cameras at roughly the same price point. However, with AI’s increasing strain on supply chains, this pattern is breaking down. Companies like Apple, Google, and Xiaomi find themselves competing over limited memory supplies, creating an industry-wide bottleneck. The anticipated iPhone 18 and Galaxy S26 may cost notably more, even though their hardware improvements could be minor or even regressions in some areas.
Consumers who value tangible hardware—such as optical zoom, battery capacity, and durable build quality—are at risk of losing out. As memory costs rise to support AI functionalities, manufacturers may have to cut corners elsewhere to manage overall costs. For example, the Galaxy S26 is rumored to be $200 more expensive than the Galaxy S25 but with an inferior camera setup, eroding the incentive to upgrade, especially for power users.
Community Pulse: Would You Accept Hardware Downgrades for AI?
So far, 88% of respondents reject hardware downgrades in favor of AI upgrades, while nearly 12% prefer waiting it out.
The Clash Between Hardware and Software Innovation
Flagship models like the Galaxy S25 and iPhone 17 now look like some of the last great “uncompromised” devices before memory shortages and supply chain disruptions intensify. As Samsung grapples with Galaxy S26 pricing and rumors swirl about a potential price hike for the iPhone 18 Pro due to its advanced 2nm semiconductor chip, consumers face difficult choices. Are enhanced AI features worth paying a premium for, even if it means sacrificing core hardware capabilities?
