The number of smartphones and personal computers sold this year is on track for a major decline. But for the manufacturers of those devices, that may not matter.

Even as unit shipments fall, analysts expect device revenue to climb this year for smartphone players Samsung Electronics and Apple as well as PC makers Lenovo, Dell Technologies and HP.

Apple's iPhones, for example, are projected by Wall Street analysts to generate 17% more revenue this calendar year, according to FactSet. Yet the International Data Corp. expects iPhone unit sales to fall 1.3% this year while smartphone shipments globally drop by 16.7%. That would be the steepest year-over-year fall ever, according to IDC.

The main reason for the disconnect between sales and revenue are memory chip prices, which are being driven higher by the AI race. Memory accounted for around 16% of the cost of materials to make a PC last year, according to Gartner, which expects the ratio to peak at 25%.

Faced with higher input costs, manufacturers are raising device prices and keeping revenue elevated. Apple raised prices by hundreds of dollars on some of its Macs and iPads this summer, and increased the price of its latest iPhones when they launched earlier this month. That includes the foldable iPhone Duo, priced at an eye-watering $1,999.

Under different circumstances, a move toward higher prices might lead others with lower-priced offerings to win market share.

Yet the leading device manufacturers have less to be worried about this time because lower-priced competitors are getting squeezed even harder.

In the smartphone world, makers of cheap Android-based devices such as China's Xiaomi, Oppo and Vivo have raised prices on some of their cheapest models. Instead of drawing away buyers of higher-end phones, their price hikes are putting them closer to competing with Samsung's lower-priced models.

"Once you cross the $200 or $250 price point you are competing with Samsung's low-end A series, and Samsung has a much more prestigious brand image, so it's going to be a very difficult time," IDC analyst Nabila Popal said.

The days of the budget laptop may also be over: With less margin available to absorb higher memory costs, "the sub-$500 entry-level PC segment will disappear by 2028," Gartner analyst Ranjit Atwal predicted earlier this year.

With memory prices expected to remain high for the foreseeable future, higher device prices look likely to persist. And that is forcing manufacturers to re-examine their business models.

Whereas in the past companies and consumers could be relied upon to upgrade regularly, high prices will likely mean they keep old devices longer and only refresh when they absolutely must.

Dell Chief Executive Michael Dell said at an analyst conference this month that the average age of PCs people and companies own would be older, and they would defer upgrades. Companies may wait for employees to complain that their PCs are too old, or replace them only when they stop working, he said.

Manufacturers can partially mitigate the impact of longer product cycles by keeping prices high. But longer cycles also put them under greater pressure to deliver new AI capabilities and other features compelling enough for customers to overcome the sticker shock.

"We don't believe it's a unit game anymore," HP chief financial officer Karen Parkhill said earlier this month. "Offering solutions that can enable AI locally at the edge is really the game right now."

Apple has another tool in its belt to mitigate price sensitivity: It can pass on much of its price increases to carriers like Verizon and T-Mobile. These companies are offering higher trade-in credits on new iPhones because it helps them move customers onto unlimited plans that are more lucrative. The higher promotions "largely offset Apple's higher pricing this year," Bank of America analysts said in a note last week.

Apple is also in a position to cater to the very high-end of the market with the Duo, which IDC expects will ship more than 17 million units by next year.

Investors haven't had much of a problem with the higher prices. Apple's stock is up about 26% this year, and is up 8% since launching its higher-priced phones. All the main PC makers' stocks are also up sharply this year-and HP's still looks especially cheap, priced at just 10 times its forward earnings.

The move toward pricier devices does come with risks, though. Apart from the added difficulty of convincing customers to upgrade, the availability of financing has become a critical factor for phone purchases. If consumers' budgets become strained or if carriers are less willing to lend buyers a financial hand, sales could evaporate. Manufacturers are also gambling that they can fend off competition from used and refurbished devices, a market that is also growing.

With input costs soaring, though, manufacturers have little choice but to make that bet.