Peter Sokunbi of Neradon Integrated Services already sees phones becoming significantly more expensive in Nigeria. Based on his market observations since December 2025, he predicts that phone prices in Nigeria could increase by up to 60%.
“The eight-gigabyte RAM we used to buy at ₦15,000 ($9.38) or ₦20,000 ($12.50) is now ₦40,000 ($25). At 2,000 pieces, that’s ₦80 million ($50,000) without taxes and fees. This increase happened within two months.”
Unfortunately, devices are about to become even more expensive because of a global chip shortage. For Nigerians, however, the situation could be far worse. Sokunbi provides explanations, but first, why is AI about to make smartphones more expensive?
How AI is making your phone more expensive
The AI boom has led to a rapid increase in the construction of AI data centres, and one of the most critical components of these facilities is memory chips. However, these same chips are essential components in smartphones, laptops, and even cars.
As all these devices compete for a limited chip supply, AI is winning by a landslide because AI chips are far more profitable.
Global spending on AI infrastructure is surging, with companies projected to invest well over $334 billion in AI-related data centres and hardware in 2025 alone, driven largely by hyperscalers like Microsoft, Amazon, Google, and Meta.
NVIDIA, whose AI GPUs power many of these facilities, saw its data centre revenue jump more than 200% year-on-year in 2024, underscoring how lucrative AI chips have become compared to traditional consumer electronics components.
With AI accelerators selling for tens of thousands of dollars per unit — far higher than smartphone processors, chip foundries naturally prioritise these higher-margin contracts, tightening supply for consumer devices.
According to Sassine Ghazi, CEO of a US semiconductor company, the three biggest memory chip manufacturers in the world — Samsung Electronics, SK Hynix, and Micron Technology are increasingly supplying AI infrastructure builders.
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While these companies plan to build more manufacturing plants to make chips available for other devices, it will take at least two years for the new facilities to be ready for production. Ghazi predicts that chip scarcity could continue well into 2027.
How will the chip shortage affect smartphones?
The current chip shortage is pushing smartphone manufacturing costs to a three-year high, as semiconductor capacity is increasingly diverted toward AI infrastructure.
According to estimates, smartphone prices could rise by 15% to 20%, particularly for devices priced below ₦ 300,000 ($187.50).
Interestingly, Samsung Electronics co-CEO TM Roh said the chip shortage will not only affect smartphones and computers but also other consumer electronics — from TVs to home appliances.
Why the chip shortage will have a worse effect in Nigeria
While experts expect the AI-driven chip shortage to increase global smartphone prices by about 20%, Sokunbi puts the figure at 60% for Nigeria.
The first reason, he says, is the illegal fees associated with importing devices into Nigeria. According to him, in the countries he imports from — Canada and the US — there are no extra or hidden payments.
“You know exactly what you’re going to pay for. But here, you will still pay extra money.”
He explains that he might pay between ₦5 million ($3,125) and ₦10 million ($6,250) to ship goods worth ₦100 million ($62,500) to Nigeria.
However, illegal fees alone could reach as high as ₦20 million ($12,500) — an additional cost ultimately passed on to the final consumer.
While computers and components like RAM are already being affected by the chip shortage, Sokunbi believes it will soon impact smartphones. Although he does not know exactly when, analysts estimate that smartphone prices could begin rising as early as March 2026.
But this would not be the first time phone prices have skyrocketed in Nigeria. Prices increased by as much as 86% between 2022 and 2023. For example, the mid-range Samsung Galaxy A52 rose from ₦166,000 ($103.75) in 2022 to over ₦300,000 ($187.50) in 2023.
According to the International Data Corporation (IDC), the price hike — driven by foreign exchange shortages and inflation — led to a 32.1% decline in Nigeria’s smartphone market in the fourth quarter of 2022.
Currently, most of the phones sold in Nigeria cost under $200 (about ₦320,000), according to Omdia. A 60% increase would push a $200 phone to $320 (₦512,000), placing the most affordable smartphones further out of reach for many Nigerians based on average earnings.
Sokunbi’s advice to smartphone users is simple: keep your devices safe. Repairs will also become more expensive as the price of parts rises.
With smartphone prices expected to increase, Africa’s most popular brands — Tecno, Infinix, and Itel may need to find new ways to keep African consumers buying, even as prices climb.
