Here’s why your next smartphone or laptop could cost more

Retailers of laptops and smartphones are coming under increasing pressure as the cost of memory chips rises, forcing many to choose between raising prices and accepting thinner profit margins in a competitive consumer electronics market.

Memory chips, particularly Dynamic Random Access Memory (DRAM) and NAND flash memory, are among the most essential components in smartphones, laptops, tablets and artificial intelligence-enabled devices. 

After nearly two years of oversupply and weak prices, the global memory market has entered a new upcycle driven by stronger demand for AI servers, premium smartphones and high-performance computing.

The rebound has pushed up procurement costs for electronics manufacturers, with the impact gradually filtering down to distributors and retailers.

The pressure is expected to be more pronounced in emerging markets such as Nigeria, where imported electronics are already affected by currency depreciation, high shipping costs and import-related expenses.

Manufacturers have begun adjusting wholesale prices, leaving retailers with options of passing the higher costs on to consumers, reducing their profit margins, or focusing on selling older inventory purchased before the price increases.

For buyers, rising memory chip costs mean much more than just paying a higher price for a new laptop or smartphone. They are likely to experience several effects across the market.

Higher prices for new devices

The most immediate impact is higher retail prices. Memory chips account for a significant share of a device’s bill of materials. If DRAM and NAND prices rise by 20 – 40 percent, manufacturers often pass some of that increase to retailers, who then pass it on to consumers.

For instance, a laptop that sold for N1.5 million could see its price increase by tens of thousands of naira, depending on the model and exchange rate.

Fewer discounts and promotions

During periods of low component costs, retailers can afford aggressive discounts during sales events. As procurement costs rise, retailers become less willing to slash prices because their profit margins are already under pressure.

This means buyers may see fewer Back-to-School, Black Friday or holiday deals.

Older models become more attractive

Consumers looking to save money may opt for previous-generation smartphones or laptops, which retailers are keen to clear before newer inventory arrives.

As a result, demand for older models and certified refurbished devices will likely increase.

 

Longer replacement cycles

Many consumers may postpone upgrading their devices. Instead of replacing a smartphone every two or three years, buyers may wait four or five years, especially if their current device still performs adequately.

This trend is already visible in many markets as consumers become more price-conscious.

 

More expensive upgrades

Memory upgrades such as SSDs and RAM modules also become more expensive because they rely on the same NAND and DRAM chips. Buyers wanting to expand storage or improve performance may therefore pay more.

Greater focus on value for money

Consumers are likely to scrutinise specifications more closely instead of choosing devices based on brand alone; buyers may compare RAM, storage, battery life and AI features to ensure they are getting the best value for a higher price.