DRAM Shortage Sparks Major Shift in Smartphone Market; Apple Less Impacted
The ongoing DRAM shortage is anticipated to cause significant alterations in the smartphone market. According to recent insights from IDC, smartphone sales may plummet by 13% in 2026. The situation arises primarily due to the escalating demand for high-bandwidth memory (HBM) from AI companies, which is diverting focus away from the memory typically used in consumer devices.
Impact of DRAM Shortage on Smartphone Production
Manufacturers are currently prioritizing HBM for data center servers, which has drained the global memory supply. IDC forecasts that smartphone shipments will decrease to approximately 1.1 billion units in 2026, a decline from 1.26 billion in 2025. Nabila Popal, IDC’s Senior Research Director, remarked on the severity of this shortage, indicating it will produce a crisis in the smartphone industry unlike any seen before.
- Expected smartphone shipments in 2026: 1.1 billion
- Expected shipments in 2025: 1.26 billion
- Projected sales drop: 13%
Shift Toward Premium Devices
While the DRAM challenge predominantly affects lower-cost Android devices, Apple appears to be more resilient. The company’s strategy of focusing on premium products allows it to navigate the crisis more effectively. Apple can sustain higher profit margins and secure more available DRAM supplies compared to lower-tier manufacturers.
However, Apple is not entirely insulated from the effects of the memory shortage. A recent report highlighted that Apple is now paying Samsung significantly higher prices for LPDDR5X memory chips intended for the iPhone 17 model. In a January earnings call, CEO Tim Cook acknowledged that memory price increases had a limited impact on the company’s gross margin during the 2025 holiday quarter. Nonetheless, he warned of a more pronounced effect expected in the first quarter of 2026.
Future Outlook for Smartphone Market
As the DRAM supply issues unfold, IDC states that even post-crisis, memory prices are unlikely to revert to levels seen in 2025. This ongoing price elevation might instigate a lasting shift towards higher-priced smartphones. The industry is set for a considerable transformation in terms of size, pricing, and competitive dynamics.
The ramifications of this shortage extend beyond just production. It signifies a broader shift in consumer preferences, potentially leading to a smartphone market dominated by premium offerings in the coming years.
