In December 2025, IDC outlined two negative-impact scenarios for the global PC and smartphone markets stemming from the deepening DRAM and NAND shortage. At the time, those scenarios ranged from low to high single-digit declines. The updated forecasts IDC released this week are considerably worse. For the worldwide PC market, IDC now projects an 11.3% unit decline in 2026, with revenues rising just 1.6% on the back of inflated average selling prices. The smartphone market faces an even sharper contraction — a 12.9% unit decline with revenues falling a slight 0.5%. Recovery, in both categories, has been pushed to 2028.
For Pakistan, a market structurally dependent on budget devices and acutely sensitive to import cost dynamics, these figures are not abstract. They describe a set of pressures that will arrive here earlier, hit harder, and take longer to reverse than the global averages suggest.
Globally, OEMs accelerated shipments aggressively through Q4 2025 and into Q1 2026 to front-load inventory before memory price increases compounded further. That pull-forward dynamic has a direct local consequence. Pakistan’s mobile phone assembly sector was still posting year-on-year output growth of 8% as recently as November 2025, with domestic production meeting roughly 93% of total device demand. Much of that activity was driven by brands racing to lock in component costs before the memory crisis worsened. What follows a pull-forward is a demand vacuum. As Q2 and Q3 2026 approach, the pipeline that was artificially accelerated will unwind. Vendors that assembled aggressively into a falling demand environment will face excess inventory, compressed margins, and constrained ability to finance new procurement. In a local assembly ecosystem where Infinix, VGO Tel, Vivo, Tecno, and Xiaomi depend on continuous throughput to justify their Pakistan operations, a sharp volume correction creates operational stress that extends well beyond the headline unit numbers.
IDC notes that more than 360 million smartphones shipped globally below $150 in 2025, with emerging markets like Pakistan exhibiting an exceptionally high concentration in this band. That observation requires little translation here. Pakistan’s smartphone market is, by design and necessity, a budget market. Transsion Group — parent of Tecno and Infinix — held 44% unit share as of Q2 2025. The dominant price corridor for locally assembled devices runs from PKR 40,000 to PKR 65,000, a range that sits squarely in the sub-$150 to sub-$200 bracket. IDC is explicit that the math does not work for a $150 smartphone when memory costs surge by double and triple-digit percentages quarter over quarter. DRAM prices surged 90–95% quarter-over-quarter in Q1 2026 alone, driven by AI data centre demand crowding out consumer device supply. Pakistani consumers have already seen the downstream signal: brands including Infinix, Tecno, and Realme rolled out quiet but material price increases at the start of 2026, with electronics prices reaching unprecedented highs by April. For vendors operating in Pakistan’s budget tier, the choices are limited — absorb the cost and destroy margin, pass it through and destroy volume, or degrade specifications. IDC projects that all three will happen simultaneously across the industry. Devices that launched with 12GB of RAM and 256GB of storage a year ago may debut with 8GB and 128GB at the same or higher price point. In a market where consumers treat RAM and storage as primary purchase signals, specification downgrades will trigger purchase deferrals, extend replacement cycles, and further compress unit volumes.
One of the more structurally significant observations in IDC’s analysis is the risk of consumers in some emerging markets reverting to feature phones as ultra-low-end smartphones below $50 cease to exist. This is not a theoretical concern for Pakistan. Of the 27.6 million mobile phones produced locally in 2025, nearly 47% — approximately 13.1 million units — were 2G feature phones, with sustained rural and low-income demand underpinning that figure. The feature phone segment here is not a historical residual. It is an active, large, and price-sensitive base that co-exists with smartphone adoption. If the entry-level smartphone floor rises sharply — driven by memory costs rendering sub-$50 device economics unviable — the upgrade pathway for Pakistan’s feature phone population narrows significantly. Smartphone penetration gains, which have been gradual and hard-won in lower-income and rural segments, face a genuine reversal risk. The aspirational device that bridges a rural consumer from a feature phone to their first smartphone may simply become uneconomical to manufacture and sell.
The IDC analysis identifies tariff uncertainty as a compounding variable globally, pointing to the 15% across-the-board import tariff the U.S. administration moved to impose after the Supreme Court struck down the broader reciprocal tariff regime. While Pakistan is not a primary target of that specific policy, it is not insulated from its second-order effects. Global OEMs adjusting sourcing strategies and revising pricing structures in their primary markets will have less flexibility to offer competitive pricing in secondary markets like Pakistan. The domestic policy environment adds its own layers. Pakistan’s import duty structure for electronics is already multi-tiered, combining customs duty, regulatory duty, additional customs duty, and an 18% standard GST. The Federal Board of Revenue revised customs valuations for smartphones and electronics in January 2026, and a proposed Mobile and Electronic Device Manufacturing Policy for 2026–33 includes an additional 5% levy on imported devices. A separate measure imposed a 25% sales tax on smartphones imported in Completely Built Up condition. These are well-intentioned as industrial policy tools designed to encourage local assembly, but in the context of rising global memory costs, they add direct price pressure on top of an already-strained cost structure. The rupee provides no buffer. The currency is projected to soften toward Rs290–295 per dollar by end of 2026. Every dollar-denominated component cost increase — including memory — is amplified in rupee terms at the point of sale, and in a market where device affordability is already stretched, that amplification translates directly into demand suppression.
IDC’s concern about AI PCs is particularly resonant in Pakistan’s context. The industry has invested heavily in marketing devices built around Neural Processing Units and on-device AI capabilities, positioning the AI PC as the next major platform cycle. Pakistan’s government committed $1 billion in AI investment by 2030 at the opening of Indus AI Week in February 2026, and the National AI Policy approved by cabinet in July 2025 explicitly frames AI access as a national priority. The aspiration to build an AI-capable device ecosystem in-country is real and documented. But as IDC notes, AI PCs have so far failed to deliver the transformative use cases promised to enterprise buyers and consumers. The software ecosystem has not kept pace with the hardware, and the genuinely meaningful applications of local AI — agentic workflows, on-device model inference, large context window management — are inherently memory-intensive. If the memory crisis drives OEMs to ship PCs with less RAM as a cost mitigation strategy, it undermines the foundational requirement of on-device AI before it has a chance to establish itself. For Pakistan’s enterprise and professional segments, which are already navigating a market where 16GB of RAM is described as a non-negotiable baseline for future-proofing, a memory mix-down trend creates a direct capability regression at exactly the wrong moment.
IDC forecasts meaningful market share shifts toward larger global OEMs that have the purchasing power and supplier relationships to secure memory allocations, while smaller and regional vendors face increasing difficulty competing for supply. In Pakistan’s local assembly ecosystem, this distinction matters enormously. The brands that dominate local production — Infinix, VGO Tel, Tecno, Itel, and domestic-heritage names like QMobile — are not the vendors with tier-one memory procurement leverage. They are precisely the smaller, regionally-focused OEMs that IDC identifies as most vulnerable. If larger global brands with stronger supply chain positions are better positioned to absorb memory costs and still move product, the competitive dynamics within Pakistan’s assembled device market shift in favour of premium-segment imported brands — at a time when rising import duties and a weaker rupee make that segment less accessible to the average Pakistani consumer. The squeeze comes from both sides: assembly economics deteriorate at the budget end, while import economics deteriorate at the premium end.
IDC expects the memory supply challenges to persist through 2026 and well into 2027. The structural driver — AI infrastructure demand competing with consumer devices for the same DRAM and NAND capacity — remains in place. There is no near-term reversion to 2025 pricing levels within the forecast horizon. For Pakistan, this means 2026 is not a transitional year with a visible recovery on the near side. The smartphone market is entering a structural reset in size, product mix, and competitive landscape, as IDC describes it — and Pakistan, with its outsized dependence on budget devices, high local assembly concentration, layered import cost structure, and a consumer base that is disproportionately price-sensitive, is positioned to feel that reset more acutely than most markets in the region. Organisations across the value chain — from local assemblers to enterprise procurement desks — should be planning not for a disruption, but for a sustained reconfiguration of what the device market looks like for the next two years.
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