The budget smartphone market may be moving in an unexpected direction this year, as rising component prices push brands to scale back hardware in low-cost devices.
According to a recent post from a reliable industry insider, several sub-brands of major smartphone makers are preparing to launch new phones in the sub-1,000 yuan segment, which is around $140.
However, the surprising part is that many of these phones may reduce hardware instead of offering the usual upgrades.
The report claims that upcoming budget phones will continue to use 1080p LCD panels and bring back the waterdrop notch.
Entry-level memory configurations are also reportedly moving back to 6GB of RAM and 128GB of storage.
Samsung has never fully moved away from the waterdrop notch in its Galaxy A0X series. The Galaxy A07 5G is one example of that design approach.
This is not the first report suggesting that smartphone memory configurations could move backward.
A report from late last year claimed that 16GB of RAM could become rare in flagship phones by 2026, while 4GB of RAM could become much more common in budget devices.
Not long ago, many affordable smartphones launched with 8GB of RAM and 256GB of storage as standard.
Now, rising component costs are forcing manufacturers to rethink their entry-level strategies.
The biggest reason behind the shift is the sharp increase in memory chip prices.
According to market research firm TrendForce, global DRAM contract prices rose by more than 40% for two consecutive quarters, from the fourth quarter of 2025 through the first quarter of 2026.
Another report from Counterpoint suggests that the situation may be even more difficult.
It says prices across the memory market increased by 80% to 90% quarter-over-quarter during the first quarter of 2026, with DRAM, NAND and HBM chips all reaching record highs.
Xiaomi founder Lei Jun also said the ongoing surge in memory prices has been “extremely aggressive.”
He predicted that prices across the memory industry could continue rising over the next two years.
Lei Jun also suggested that users planning to upgrade their phones may want to do so sooner rather than later.
If memory prices remain high, higher-capacity variants could become increasingly expensive.
Budget phones may also continue making compromises that many buyers thought had already disappeared from the market.