Apple is navigating a global memory chip shortage as demand for its iPhone 17 models drives strong sales projections. CEO Tim Cook told investors last week that memory chip prices were expected to rise sharply, though he declined to say whether Apple would increase iPhone or Mac prices in response. “There are different levers that we can push, and who knows how successful they’ll be, but there’s just a range of options,” Cook said on the post-earnings call.
Analysts note that Apple’s longstanding relationships with major suppliers, including Samsung Electronics, SK Hynix, and Micron, provide the company with an advantage over smaller smartphone manufacturers. Even amid tight supply, Apple is expected to secure enough memory chips to meet production targets, while competitors may face significant constraints.
Industry Impact and Strategic Decisions
The shortage stems in part from a rapid expansion of AI infrastructure by firms such as Meta, Google, and Microsoft, which has absorbed substantial memory chip capacity. Manufacturers are prioritizing high-margin data center components over consumer devices, pushing prices higher. DRAM, the primary memory chip used in smartphones, is critical for supporting power-intensive applications, making the shortage particularly acute for handset makers.
Apple’s decision on whether to pass on higher costs to consumers could have far-reaching consequences. Holding prices steady could allow Apple to capture market share from rivals constrained by supply, while raising prices would give competitors the opportunity to maintain margins. “This is the biggest question for the industry now,” said Nabila Popal, senior research director at IDC. She added that keeping prices stable could boost Apple’s market share but may risk investor dissatisfaction.
Competitors and Market Pressures
Some analysts expect the memory chip crunch to contribute to the first annual decline in the global smartphone market since 2023. Qualcomm, the world’s largest smartphone chip designer, reported lower-than-expected earnings due to shortages at handset customers, particularly in China. Finance chief Akash Palkhiwala said several original equipment manufacturers had reduced build plans and inventory levels because of insufficient memory chips.
Industry observers note that Android phone makers are closely watching Apple’s strategy. “If Apple absorbs the whole memory increase and doesn’t change its phone price, then Android phones become more expensive, and expected volumes could be affected,” said a veteran smartphone executive, speaking on condition of anonymity. Analysts predict that Apple could continue to capture a disproportionate share of available DRAM, further widening the supply gap for rivals.
Outlook
As Apple weighs pricing and profit strategies, the company’s decisions are likely to influence competitor behavior and shape the global smartphone market in 2026. Market participants are watching closely, as the choice could determine both Apple’s market share and broader industry trends during the memory chip crunch.