Apple can absorb rising DRAM costs better than others

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Apple faces a challenging market environment that is likely to shape the entire smartphone sector until at least 2026. Rising prices for memory chips, especially DRAM, are putting manufacturers worldwide under pressure. New data from Counterpoint Research shows that Apple and Samsung are significantly better positioned than their competitors to cope with this development. For many other brands, the next few years could be considerably more difficult.

The smartphone market was long considered stable, but this stability is increasingly faltering. Supply bottlenecks, higher production costs, and a shift in priorities among chip manufacturers are noticeably changing the landscape. Apple plays a special role in this environment. Thanks to its financial strength, high margins, and significant influence over the supply chain, the company can cushion developments that would quickly become an existential threat to other manufacturers.

Storage bottlenecks are changing the smartphone market

Counterpoint Research has significantly revised its forecast for the global smartphone market downwards. Instead of expected growth of 0.45 percent, a decline in sales of 2.1 percent is now predicted by 2026. The main reason is a persistent memory shortage, which has noticeably increased the cost of key components.

Prices for memory chips have already risen by 10 to 25 percent. DRAM, which is used in almost every smartphone, is particularly affected. This development directly impacts manufacturers' production costs and puts a strain on companies with lower profit margins.

The bottleneck is caused by AI servers

According to Counterpoint, the memory shortage is not short-term. Chip manufacturers are increasingly prioritizing advanced memory for AI servers, as it promises higher margins. This pushes simpler DRAM for smartphones into the background.

This strategic shift in production capacity has already led to supply bottlenecks. Counterpoint expects this situation to continue until at least 2026. For the smartphone market, this means permanently increased costs and limited availability.

Apple and Samsung have a clear advantage

According to Yang Wang, Senior Analyst at Counterpoint Research, Apple and Samsung are best positioned to weather the coming quarters. Both companies have sufficient flexibility to manage rising costs without immediately jeopardizing market share or profitability.

The situation is considerably more difficult for other manufacturers. Chinese brands like Honor and Oppo are particularly under pressure. Their lower profit margins leave little room to absorb rising memory prices. Especially in the entry-level segment, costs have already increased by 20 to 30 percent since the beginning of 2025, further exacerbating the situation.

Rising prices and possible cutbacks in features

Counterpoint expects average smartphone prices worldwide to rise by 6.9 percent next year. Many manufacturers will be forced to pass on the higher costs to buyers or focus more on more expensive premium models.

Alternatively, technical compromises could be made. These include simpler cameras, reduced memory capacity, or generally scaled-back specifications. These measures are intended to help mitigate the impact of rising DRAM costs, but could diminish the appeal of the devices.

Apple's handling of higher DRAM costs

Apple is likely to largely refrain from such drastic measures. The company benefits from enormous cash reserves and strong influence within the supply chain. Analysts expect Apple to initially absorb the higher DRAM costs itself, without raising sales prices in the short term.

This strategy allows Apple to remain stable while remaining flexible enough to react to future market changes. Price adjustments could be made later if the situation worsens or long-term supply contracts are renegotiated.

Apple remains stable despite rising DRAM prices

Apple is proving more resilient than many competitors in the current market environment. While rising DRAM prices are slowing the smartphone market and putting particular pressure on manufacturers with low margins, Apple is able to maintain its position. Financial strength, control over the supply chain, and strategic restraint regarding price adjustments ensure that the company is likely to weather the coming years without major cutbacks. (Image: JDunbarPhoto / DepositPhotos.com)