Memory Costs Skyrocket: Apple's Resilience Amidst the Storm
The smartphone industry is facing a memory crisis, and Apple's future is at stake. But here's where it gets controversial: while memory costs have surged to nearly half of a smartphone's BOM, Apple remains insulated for now. So, what's the catch? And this is the part most people miss: it's not just about Apple's resilience, but also about the industry's future.
TrendForce reports that memory costs have skyrocketed, with a typical 8GB+256GB configuration surging by nearly 200% year-over-year in Q1 2026. This means that memory now accounts for between 30-40% of a smartphone's BOM, and is rapidly closing in on the 50% mark. In the worst-case scenario, global smartphone production could contract by over 15%.
But here's the twist: Apple is relatively insulated from this crisis. The company has implemented a series of cost management steps, and its higher proportion of premium models and customer base's tolerance for price increases provide partial support for production stability. In fact, Apple has already implemented cost control measures to prevent a price hike for the iPhone 18 variants, aiming to keep the starting selling prices unchanged or at a similar level to those of their iPhone 17 counterparts.
However, the industry's future is still at stake. The bear-case scenario laid down by TrendForce projects a 10% decline in smartphone output in 2026, while the worst-case scenario could see a contraction of over 15%. Huawei, on the other hand, is likely to experience the smallest production adjustment under the bear-case scenario, and could even post growth against the broader market trend, thanks to its strong brand loyalty and unique market position in China.
So, what does this mean for the industry? And what do you think? Do you agree with TrendForce's projections? Or do you have a different interpretation or counterpoint? Share your thoughts in the comments below!
