South African consumers enjoyed a rare run of falling technology prices in early 2026 – but the reprieve is already ending as a global memory shortage pushes the cost of phones, laptops and other devices back up.

Data from NielsenIQ (NIQ) shows that in the first quarter, unit sales of technology and durable goods outpaced growth in sales value as average selling prices declined, with affordability the single most important factor in consumers’ buying decisions. Shoppers bought more but spent less, trading down to cheaper models across nearly every category.

The standout weakness was telecommunications, which NIQ uses to track the smartphone market. Unit sales fell 7.5% and sales value dropped 3.1% in the quarter, dragging down the broader technology and durables market. Post-paid customers held onto their handsets for longer in the absence of compelling new features, NIQ said, and average prices kept sliding as buyers gravitated towards prepaid and mid-tier devices.

Running out

Meanwhile, sales of laptops, monitors and routers pushed unit sales up 5.8%, but falling prices dragged total value down 9.4%. Panel television volumes rose 8.8% even as their value slipped 2.4%. Only major domestic appliances grew in both volume and value, helped by lower prices on freezers and washing machines.

That period of cheaper tech, however, is running out. NIQ warned that memory and storage shortages are already driving up prices for phones, laptops and other devices, and that rising component costs will make it harder for retailers to stimulate demand through price cuts alone. NIQ South Africa MD Zak Haeri said the squeeze, alongside renewed fuel-driven inflation, will “put real pressure on household budgets” for the rest of the year.

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The culprit is the AI boom. The world’s three big memory makers – Samsung, SK Hynix and Micron, which between them control more than 95% of the market – have been diverting production towards the high-bandwidth memory used in AI data centres, where margins are far richer. That has starved the market of the conventional DRAM and NAND flash that goes into consumer phones and computers, sending prices soaring.

Counterpoint Research estimates mobile DRAM prices have risen by nearly 70% since early 2025, while NAND flash storage has nearly doubled.
Research firm TrendForce says smartphone and notebook brands are being forced to raise prices and even cut specifications, with some entry-level phones reverting to 4GB of memory.
IDC expects DRAM and NAND supply to grow well below historical norms this year, and forecasts that global smartphone average selling prices could climb between 3% and 8%, with the cheapest handsets – those under US$100 – at risk of disappearing altogether. PC makers have warned of price increases of 15-20%.

For a price-sensitive market like South Africa, where NIQ’s data shows consumers were already deferring upgrades and trading down, the timing is bad. The brief stretch in which falling device prices cushioned cash-strapped households is ending just as fuel costs reignite inflation – consumer inflation hit 4% in April, its highest since August 2024.