2026 budget phones to bring back the waterdrop notch, and that’s not the only downgrade

The budget smartphone market may be heading in an unexpected (or expected?) direction this year. According to a recent post from a reliable industry insider, several sub-brands of major smartphone makers are preparing to launch new devices in the sub-1,000 yuan (around $140) segment.

The surprising part is that many of these phones will scale back hardware instead of improving it.

The report claims that the upcoming budget phones will continue to use 1080p LCD panels and bring back the waterdrop notch. The entry-level memory configurations are also reportedly reverting to 6GB of RAM and 128GB of storage.

This isn’t the first time we’ve heard such news. A report late last year suggested that 16GB of RAM could become rare in flagship phones by 2026, while 4GB of RAM could become far more common in budget devices.

Blame the memory crisis, folks

You probably already know who is to blame. The biggest reason 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 the situation may be even more difficult. It says prices across the memory market increased by 80–90% 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 that the ongoing surge in memory prices has been “extremely aggressive” and predicted that prices across the memory industry could continue climbing over the next two years. He also suggested that users planning to upgrade their phones may want to do so sooner rather than later.

Not long ago, many affordable smartphones launched with 8GB of RAM and 256GB of storage as standard. However, as component costs continue to rise, manufacturers are rethinking their entry-level strategies.

If memory prices remain high, higher-capacity variants could become increasingly expensive, while budget phones may continue making compromises that many buyers thought were a thing of the past.

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