Smartphone storage is set to grow in 2026 despite rising costs

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We have talked about the rising cost of smartphones this year. But today, a new report highlighted by Android Authority suggests that average smartphone storage capacity will continue to increase in 2026, even as component prices climb. According to market research firm TrendForce, average storage across smartphones is expected to rise by about 4.8% this year.

AI Is Driving the Need For More Storage

One of the biggest factors behind the increase is the growing role of on-device artificial intelligence. Modern AI features require significant local storage to function efficiently, with some estimates suggesting that AI systems alone can take up 40GB to 60GB of space. As more brands integrate AI capabilities directly into smartphones, higher storage configurations are becoming less optional and more essential.

256GB To Be the New Baseline

The report also points to a major shift in baseline storage tiers. Several flagship devices are already moving away from 128GB as the entry-level option, with newer models starting at 256GB instead. This trend is expected to accelerate, with 256GB potentially becoming the standard configuration for mainstream smartphones by the end of 2026.

Another contributing factor is the gradual phase-out of lower-capacity storage options. Manufacturers and NAND suppliers are reportedly reducing or discontinuing smaller storage variants due to lower profit margins and evolving production processes. As a result, budget and mid-range devices are increasingly shifting toward higher storage tiers like 128GB and 256GB.

Rising Costs Still Pose Challenges

Despite the increase in storage capacity, the broader outlook for the smartphone industry remains challenging. Rising prices for key components such as RAM and NAND flash are putting pressure on manufacturers, which could lead to higher retail prices for consumers. This creates a balancing act where brands must offer more storage and features while managing tightening margins.

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