A new report published by Counterpoint Research reveals the contraction in the US smartphone market. Price pressure created by rising memory costs is negatively impacting devices, especially those in the lower segment.

While large manufacturers can more easily manage the increase in component costs, smaller manufacturers are experiencing significant difficulties in this process. This change across the market continues to directly affect consumer preferences and device prices.

Rising costs hit the low-end segment

According to Counterpoint Research data, total US smartphone sales of Apple, Samsung, Motorola, and Google declined by 4 percent year-on-year in the second quarter of 2026. In the rest of the market, sales dropped sharply by 45 percent due to cost difficulties experienced by smaller manufacturers.

In particular, smartphone sales under $100 have decreased by approximately 65 percent compared to the same period last year. This has allowed brands like Samsung and Motorola to increase their prepaid market share as the price gap between entry-level and more affordable devices closes.

On the Apple side, while the company increased prices on other products, it managed to keep iPhone prices stable in the US. However, analysts and market reports predict that Apple may change its pricing strategy with the iPhone 18 series, which is expected to be introduced in a few weeks.

iPhone 18 series and market expectations

Counterpoint states that it expects Apple to increase prices for the iPhone 18 series models. Given that these models account for more than half of Apple’s total smartphone sales in the third quarter, it is assumed that these price increases will have a significant impact on average retail prices.

Analyst Jeff Pu predicts a price range of $1,349 to $1,399 for the iPhone 18 Pro models and $1,449 to $1,499 for the iPhone 18 Pro Max. Some reports suggest the starting price of the iPhone Ultra model could be around $2,500.

In its third-quarter 2026 financial report released last month, Apple announced that iPhone revenue increased by 22 percent to $54.2 billion. Despite this, the company warned that memory costs and supply constraints would become more pronounced in the September quarter, particularly for iPhones, iPads, and Macs.

The future trajectory of sales will depend on how much carriers subsidize the new models. While a strong upgrade cycle is expected with users transitioning from the iPhone 15 series, it remains to be seen whether carriers will continue to offer devices for free or at near-free prices.

How do you think this constant upward trend in smartphone prices will change users’ device replacement habits?