Smartphones were once the preserve of tech enthusiasts and corporate professionals, but fast forward to 2026 and 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 ten people aged 55 to 65.

Yet 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’ve been putting off an upgrade or new purchase is that smartphones are about to get a lot more expensive because of the rapid growth of AI.

Telecoms expert Ernest Doku of price comparison firm Uswitch says prices of premium phone models will increase this year as memory components such as DRAM (dynamic random access memory) – most commonly used in computers and mobile devices – become more expensive as they’re 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 a lot more conscientious about how much they’re paying for their devices,” he says.

The demand from AI firms such as OpenAI and Google for components companies to make and provide enough physical DRAM to run power-guzzling AI data centres has in turn 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 price on phones in all price brackets, consumers can also expect price increases to their mobile contracts.

“All UK mobile network operators are cash-strapped as margins are being squeezed. Striking the right balance between raising much-needed funds and investing in next-generation networks is never easy,” says analyst Paolo Pescatore, founder of analyst firm PP Foresight.

Since regulator Ofcom ruled that from January 2025 mobile providers must state by how much mid-contract prices will increase in clear pounds and pence, rather than linking hikes to inflation, providers have struggled to strike a balance. Last year, O2 announced some mobile customers would see bills rise by £2.50 where it had previously stated rises would be £1.80, a move Uswitch’s Doku describes as “problematic”.

The new rules allow operators to charge a flat rate for all customers across all tariffs, which could prompt consumers to switch providers for a cheaper deal or join a network that doesn’t increase fees annually.

“All those consumers who have made a move to cheap SIMs are now facing, proportionally, 12%, 15% or 20% price rises, therefore the decision to switch is much more front of mind than a lot of the networks anticipated,” says Doku. “We’re going to see a lot of networks that don’t apply price rises really dial up that message to consumers.”

These providers include Giffgaff, Tesco Mobile and Lebara and are known as mobile virtual network operators (MVNOs) because they lease network capacity from EE, O2 or VodafoneThree, the latter of which merged two of the UK’s major networks last year. Customers of both Vodafone and Three should soon see the fruits of this union.

“2026 is the year consumers will feel the difference with massive spectrum sharing, the phone going between Three and Vodafone masts automatically to really boost reliability,” said Doku.

Customers’ existing phones connecting to both Vodafone and Three signal masts is a benefit that currently incurs no extra cost. says the merger was good for consumers because it intensified competition with EE and O2.

“There are no new customers left,” adds Wood. “Everyone who wants a phone has got a phone, so either you hold on to the customers that you’ve got, or you steal them from someone else. On that basis they [operators] have to remain hypercompetitive in order to maintain their position in the marketplace.”

In October last year, O2 announced a partnership with Elon Musk’s Starlink satellite firm to “boost rural UK mobile coverage”, though it will initially only cover messaging and data services. Unlike VodafoneThree’s automatic coverage benefits, O2 customers must sign up to register interest in the scheme.

Mobile customers who already own their phone outright from paying off their handset contracts, or who can afford to buy a new phone upfront in 2026, will turn to MVNOs that offer cheaper, 30-day rolling SIM-only plans. New entrants include challenger bank Revolut, which offers unlimited 5G data, calls and texts for £12.50 per month. Rival Monzo could also enter the mobile market this year along with buy now pay later firm Klarna.

But chasing savings on your bills could be a dead end.

“Arguably there are bigger savings on switching TV providers as content is now available across numerous players offering a range of bundles including streaming services,” says Pescatore.

Price rises aren’t the only development coming down the phone line. While high end smartphones are pushing well over the £1,000 mark – the iPhone 17 Pro costs from £1,099 and the Samsung Galaxy S25 Ultra retails at £1,249 – the most anticipated phone of this year is likely to tip the scales closer to £2,000.

“This is an important year for foldable phones because all the rumours point towards Apple introducing a folding iPhone, and whenever Apple does something everybody wants to know about it,” says Wood.

Foldables have flexible screens that open and close like a book or old school flip phone. They provide a bigger screen space for entertainment and multitasking functionality. Apple’s main smartphone rival Samsung released its first folding phone in 2019, though high prices and durability concerns have stunted foldable phone growth to about 30 million units annually worldwide, says Wood.

Global smartphone shipments overall are about 1.2 billion but the foldable market’s comparatively small 30 million annual sales could soar with the arrival of an iPhone model. It is said to fold book-style like the £1,799 Samsung Galaxy Z Fold 7 rather than a flip phone but Wood says the price could be costly so as not to cannibalise sales of Apple’s existing high-end phones.

January has already seen Chinese Android company Honor release its impressive Magic 8 Pro handset in the UK at £1,099 with a 200 megapixel telephoto zoom lens and a focus on AI software to edit photos, translate text and integrate AI software Google Gemini. Honor also recently showed off a concept device called the Robot Phone with a swivelling camera, personified in marketing videos to recall Disney and Pixar’s Wall-E.

Next month could see Samsung announce new premium Galaxy S phones, and the UK is waiting to see if it will get the Galaxy Z TriFold, a phone headed to other markets that folds not once, but twice, opening from a regular phone size to reveal a 10-inch tablet screen. Prices would likely far exceed £2,000.

“It is a statement device,” said Dario Betti, CEO of the Mobile Ecosystem Forum. “Samsung is using it as a technology pilot, not a revenue engine. Volumes are tiny by design. The objective is to show what Samsung can build before Apple enters the field.”

This month, Apple and Google announced a new partnership that will see Google Gemini power the next generation of Apple’s Siri personal assistant. But all these new, expensive phones with AI won’t necessarily convince the UK public to invest.

“People are holding on to their phones for longer because innovation has slowed and phones have got better,” said Wood. People are now keeping phones for up to four years before upgrading.”

That could see phone buyers this year turn to the increasingly mature refurbished phone market, where buying a secondhand device is less risky than it used to be thanks to established retailers that offer warranty.

“A two year old iPhone is not a million miles away from a brand new iPhone today,” Wood said. “There are going to be trade-offs, but it’s going to save you a lot of money.”

One area where it may pay to get a new phone are the improvements to battery life being made by some Android brands. New silicon-carbon batteries are being used in phones such as the OnePlus 15, which can offer three days of normal use on a single charge. The technology appears to outperform traditional lithium-ion batteries considerably.

“It’s a real, genuine leap in battery technology,” says Doku. “Samsung will seriously consider adopting the technology, and Apple might enter the fray.”

But even if Apple’s folding phone battery doesn’t last for three days, Android brands will struggle to tempt long-time iPhone owners to switch platforms. “I call Apple the Hotel California of smartphones,” says Wood. “Once you’re in, you’re not really leaving, right?”