The expansion of data centers for artificial intelligence is reshaping the smartphone industry. According to Counterpoint Research, shipments of budget smartphones priced under $200 are projected to drop by 40% between 2025 and 2030, resulting in a loss of over 230 million units annually by the end of the decade.
Analysts attribute this decline to rising costs for memory and chipsets, stricter hardware requirements, and manufacturers' reluctance to maintain unprofitable entry-level lines. As component costs represent a significant portion of budget device pricing, companies have limited flexibility to offset these expenses.
While the overall smartphone market is expected to recover to 2025 levels by 2030, the industry structure will shift toward mid-range and premium models. This transition may reduce internet accessibility for low-income populations, forcing consumers to choose between more expensive new devices or the secondary market for refurbished hardware.
Competition by 2030 will center on mid-range devices, with manufacturers focusing on design, camera quality, battery life, and reliability. Revenue growth is expected to be driven by premium models, benefiting established players like Apple, Samsung, and Huawei as they adapt their strategies to these new market conditions.
