The market researcher IDC speaks of a “crisis like no other,” and even the burdens caused by the pandemic and trade tariffs seemed almost harmless in comparison. We’re talking about the ever-increasing memory shortage and skyrocketing prices. The market will experience a seismic change – in volume, average prices and competitive structure. No trend reversal is expected before mid-2027; the problems will only increase until then. The IDC expects only 1.1 billion smartphones to be delivered in 2026, compared to 1.26 billion last year. AI providers buy whatever they can buy
As has been discussed several times, the core of the problem is DRAM – in particular “High Bandwidth Memory” (HBM), which is required for AI servers in data centers. Major AI providers are currently purchasing enormous quantities of these specialized memory chips. Manufacturers are therefore prioritizing the production of HBM over classic DRAM, which is used in smartphones and other consumer devices. The result of this is that, according to IDC, the global storage market will be “empty” until next year. Prices are rising significantly while smartphone manufacturers are having increasing difficulty securing sufficient components.
Cheap smartphones could disappear
Cheaper Android devices in particular are suffering particularly from rising prices. Margins there are often extremely tight and price increases can only be passed on to end customers to a limited extent. Even if the DRAM shortage eases from 2027, the IDC does not expect a return to the price level of 2025. This could have structural consequences, namely permanently higher smartphone prices and a greater concentration on high-margin, expensive devices. The age of low-priced smartphones could be coming to an end, as they are becoming disproportionately more expensive and are thus approaching higher-quality products.
Apple expects more significant impacts starting this year
During the latest quarterly figures, Tim Cook said rising memory prices had so far had only a minimal impact on gross margin. However, a somewhat stronger effect is expected for 2026 – especially since a report just said that Apple should expect purchasing prices to double. However, as a provider that is active in the premium segment, you are in a much better position than a large part of the rest of the market. Fluctuations are easier to absorb internally due to particularly high margins, and customers are also less price sensitive.
