Rising memory costs were supposed to be an industry problem. Turns out they might be an Apple opportunity.
Apple has already put its prices up across most of the lineup, covering Apple TV, HomePod, iPad, Mac and Vision Pro. The iPhone has been left alone so far, but nobody seriously expects that to survive September. When the iPhone 18 line lands, expect the numbers to creep.
Normally that would be straightforwardly bad. Higher price, less demand, unhappy shareholders. Except the rest of the phone market is having a considerably worse time of it.
The Budget Android Squeeze
Market research firm Omdia reckons the sub $400 smartphone segment is collapsing. Not softening. Collapsing. Their figures point to a year on year decline of more than 22% in that price bracket, driven almost entirely by what memory now costs to put inside a handset.
The maths is brutal. RAM and NAND make up a chunk of the bill of materials on any phone, but on a cheap phone they make up a much bigger proportion of it. When memory prices spike, a £900 flagship absorbs the hit. A £250 handset does not. Omdia’s read is that low end devices are already tipping into unprofitable territory, and that vendors are quietly stepping back from the segment rather than sell at a loss.
It gets worse from here, too. Memory pricing is expected to keep climbing through the coming quarters, which means the manufacturers pulling out now are the early ones.
Why This Helps Cupertino
Here is the interesting bit. Apple’s entire pricing problem has always been relative. The iPhone was never expensive in isolation, it was expensive compared to the Android sitting next to it on the shelf for a third of the price.
Shrink that gap and the calculation changes. Someone who mentally filed the iPhone under “not for me” at a £400 delta might think differently at £150. If the entry level Android that used to cost £300 now costs £500, an iPhone 16e or whatever replaces it starts looking a lot less absurd.
Apple also has an advantage most Android OEMs simply do not have: scale, long term supply contracts, and enough margin cushion to eat a cost increase without gutting a product line. When memory gets expensive, the company buying the most memory has the most leverage.
The Catch
None of this is guaranteed. Plenty of people priced out of a £300 Android are not going to solve that by spending £600 on an iPhone. They are going to buy nothing, or buy refurbished, or hang onto the phone they already have. Global smartphone volumes could just shrink.
But if you are looking for a reason Apple might come out of a memory shortage in better shape than everyone else, this is it. Not because Apple got cheaper. Because everyone else stopped being cheap.
