Avoid making a bad call on a new smartphone

As AI hoovers up data storage capacity, experts warn it will send phone costs skyrocketing. Deputy technology editor HENRY BURRELL outlines what you need to know

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Servers in a data centre as AI takes hold of technology

SMARTPHONES were once the preserve of tech enthusiasts and corporate professionals, but today the number of people without one is dwindling fast.

An incredible two in three people aged 65 and over in the UK now use a smartphone — the equivalent of around 8.5 million in total — with that figure rising to nine in 10 people aged 55 to 65. But while smartphone usage has become ubiquitous, so has the bewildering level of information about the types of models, deals and packages available on the market.

And the bad news for consumers who have delayed an upgrade is that smartphones are about to get more expensive due to AI.

Telecoms expert Ernest Doku says prices of premium phone models will increase as memory components such as DRAM (dynamic random access memory) — most commonly used in computers and mobile devices — become more expensive as they are used to power AI services such as ChatGPT.

“There’s a risk of affordable upgrades being a thing of the past — consumers are going to be more conscientious about how much they’re paying for their devices,” he says.

Al firms such as OpenAl and Google are sucking up huge amounts of memory at power-guzzling Al data centres, which has created a global shortage of DRAM.

“That shortage has massively pushed up the price to somewhere between 50% to 70% for RAM,” says Ben Wood, chief analyst at industry research company CCS Insight. “For phones, you could see price rises of somewhere between 5% and 10% in 2026.”

While manufacturers will increase prices on phones in all brackets, consumers can also expect price increases to their mobile contracts.

“All UK mobile network operators are cash-strapped as margins are being squeezed,” says Paolo Pescatore, founder of analyst firm PP Foresight.