US smartphone sales fell 5% year-over-year in the second quarter as surging memory chip prices and softening consumer demand weighed on the market, with the sub-$100 segment absorbing the heaviest blow.

According to Counterpoint Research on the 15th, sales of smartphones priced below $100 (approximately 140,000 won) in the US market plunged 64% year-over-year in the second quarter. Manufacturers cut shipments or raised prices as memory chip costs climbed.

Rising oil prices stemming from Middle East conflicts eroded consumer purchasing power for electronics, while a surge in RAM demand from hyperscale cloud providers drove up memory costs for smartphone makers. The low-margin budget segment bore the brunt of this cost pressure.

Big players hold firm, smaller brands collapse

Combined sales of the top four manufacturers—Apple, Samsung Electronics, Motorola, and Google—fell just 4% over the same period, a relatively resilient performance. By contrast, sales among smaller smartphone makers outside the top four plummeted 45%.

Counterpoint noted that large manufacturers leveraged economies of scale to secure component inventory at levels smaller brands could not match at viable price points. Some smaller players, including HMD, had already exited the US market or scaled back operations last year amid tariff concerns and a sluggish prepaid segment. The added pressure of rising memory and storage prices has made the business environment even more difficult for smaller vendors focused on low-cost, low-margin products.

Carrier-branded budget phones saw a particularly steep decline. US prepaid phone sales fell 11% year-over-year in the second quarter.

Samsung and Motorola expand share despite price hikes

Even as the prepaid market contracted, Samsung Electronics and Motorola capitalized on competitors’ struggles and exits to significantly boost their market share. Wireless carriers leaned on Samsung’s Galaxy A series and Motorola’s Moto G series to retain customers churning out of prepaid plans. With budget lineups shrinking, carriers were effectively left with just these two brands as viable options.

Samsung’s share of the US prepaid smartphone market jumped 9 percentage points to 47% in the second quarter, up from 38% a year earlier. Motorola gained 4 percentage points to reach 32% over the same period.

Buoyed by strong sales, both companies opted to raise prices. Samsung hiked the price of the Galaxy A17 by $50 (approximately 71,000 won) in July. Motorola also raised prices on select G series models during the second quarter. Thanks to Motorola’s price increases on its flagship models, the company’s share of the $200–$300 (approximately 280,000–420,000 won) segment—previously a gap in the US market—tripled year-over-year.

Price hikes expected to continue into second half

The upward trend in North American smartphone average selling prices (ASP) is expected to persist into the third quarter. Apple is anticipated to raise prices on the iPhone 18 series, while Google has already priced its Pixel 11 series, launched this month, $100 higher than its predecessor.

Counterpoint expects margin pressure on low-end smartphone makers to intensify as price increases continue across the market, and projects the prepaid segment will likely consolidate around Samsung Electronics and Motorola.