The global memory shortage is set to hit the smartphone market hard in 2026, and Apple stands in a stronger position than most rivals as rising DRAM costs threaten shipments, margins, and pricing across the industry.
Memory makers have shifted production toward high-bandwidth memory used in AI data centers, which has drained supply for consumer devices and pushed prices sharply higher. As a result, smartphone vendors now face higher bills of materials and tighter component availability at a time when demand already shows signs of slowing.
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That supply squeeze will reshape the market next year, with fewer devices shipping and average selling prices moving up as brands cut low-margin models and raise prices where they can. The pressure falls heaviest on companies that compete in the entry-level and mid-range segments, where memory accounts for a larger share of total costs and margins remain thin.
IDC said (via Bloomberg) the global smartphone market will contract 12.9 percent in 2026, with shipments dropping to about 1.1 billion units from 1.26 billion in 2025.
“The tariffs and pandemic crisis seem a joke compared to this,” said IDC Senior Research Director Nabila Popal. “The smartphone market will witness a seismic shift by the time this crisis is over in size, average selling prices and competitive landscape. We don’t expect the situation to ease up until mid 2027, at least.”
IDC also warned of a “crisis like no other,” as AI demand continues to pull wafer capacity away from conventional DRAM and NAND used in phones and PCs.
Apple is Better Positioned
Apple operates primarily in the premium segment, where memory represents a smaller portion of total costs and profit margins offer more room to absorb higher component prices. The company also locks in supply through long-term agreements, which helps secure DRAM 12 to 24 months in advance.
While Apple is not immune to rising costs and has reportedly paid more for LPDDR5X memory in upcoming iPhone models, it can absorb short term increases more easily than brands that rely on sub $200 devices to drive volume. As cheaper smartphones become harder to sustain, the shift toward higher-priced models will favor companies that already focus on premium hardware.
Even after supply improves, IDC does not expect memory prices to return to 2025 levels, which signals a lasting reset in smartphone pricing and a market that looks very different by 2027.
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