Rising memory and storage expenses are propelling consumers towards higher-end smartphones, with premium devices now capturing a growing share of global sales despite ongoing supply chain challenges.
Rising memory and storage costs are reshaping the smartphone market in a way that is pushing more buyers towards premium devices. What might once have looked like a stretch for household budgets is now, in many cases, only a modest step above a well-specced mid-range handset. That narrowing gap is helping high-end phones win a larger share of global sales, even as the overall market remains under pressure from component shortages and higher manufacturing costs.
Counterpoint Research said premium phones priced above $600 accounted for 29% of global handset sales in the first half of 2026, up from 25% a year earlier and well above 20% in the first half of 2022. The firm also said premium volumes rose 5% year on year over the period. In practice, that means roughly one in every three to four phones sold globally now sits in the high-end category.
The shift is not being driven only by demand for better cameras, faster chips and longer software support, although those remain important. Analysts say the bigger change this year is cost inflation across key parts, especially DRAM and NAND flash memory. Those components have become materially more expensive, and the impact is being passed through most sharply in low-end and mid-range models, where manufacturers have less room to absorb higher costs.
Counterpoint and other industry trackers have said the wider market has been volatile through 2026, with global shipments falling in both the first and second quarters as shortages tightened. At the same time, average selling prices have climbed. Counterpoint said the global smartphone average selling price passed $400 for the first time in the first quarter, while other market estimates put the full-year average closer to $565, reflecting both component inflation and a deliberate shift by vendors towards more profitable products.
The premium segment remains heavily concentrated. Apple and Samsung together controlled 84% of high-end smartphone sales in the first half of 2026, up from 82% a year earlier. Apple remained the largest player, helped by strong demand for the iPhone 17 range, while Samsung held second place, supported by the Galaxy S26 family despite a later launch. Apple’s share of the premium market has narrowed from 74% in the first half of 2022 to 65%, however, as competition in China has intensified.
Chinese brands are gaining ground. According to Counterpoint, Oppo recorded the fastest growth in the premium segment, with sales up 69% in the first half, while vivo grew 20%. Huawei and Xiaomi are also pushing harder into flagship territory, as domestic buyers become more willing to choose local premium devices. Even so, the market remains dominated by Apple and Samsung, and the clearest near-term effect of rising prices appears to be a buyer preference for “step-up” purchases, where a mid-range phone looks too expensive to justify but a flagship feels only slightly more costly.
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