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The problem stems from AI data centers. Major tech corporations are buying up massive amounts of memory to train and run artificial intelligence models, and this demand has depleted the supplies that were intended for smartphones and computers.

At the same time, leading chip manufacturers were chasing profits. Samsung, SK Hynix, and Micron shifted production to high-margin AI memory, leaving less capacity for consumer devices.

As a result, according to IDC (International Data Corporation), the cost of memory has nearly tripled over the past year. Currently, memory accounts for over 65% of the cost of components in an inexpensive phone.

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This shift has hit companies that manufacture budget devices the hardest.

Apple has already passed on some of these costs to customers by raising prices for Macs and iPads in June, while keeping the price of the iPhone unchanged. LINE_BREAK The downturn is uneven. According to IDC, the crisis in the memory market has divided the industry: major players and manufacturers of premium devices have benefited, while manufacturers of low-cost phones produced in mass quantities have suffered. LINE_BREACK The difference is striking. Apple and Samsung are the only two of the top five to show growth: 15.3% and 8.1% , respectively. Xiaomis sales plummeted by 26.3% , vivos by 19.4% , and OPPOs by 17.5% . LINE_BREAK In China, only Huawei and Apple posted growth of about 15% each, while their competitors raised prices and lost undecided buyers. Budget brands relied on older 4G models to keep prices low amid cuts to government subsidies. , detected_source_language : EN LINE_BREACK A consistent trend is evident. When the price gap narrows, buyers tend to choose products from trusted brands rather than opting for cheaper alternatives. LINE_BREACK For Apple, the shrinking market meant a strengthening of its leadership. The company is on track for a record annual market share of 22% . Apple shares also hit a new all-time high on July 13, closing at $317.31 after an intraday high of $323.45, while its market capitalization reached approximately $4.

7 trillion. LINE_BREAK Large investors secured advantageous positions in advance. Institutional investors hold about 81% of Apples shares, and in the last quarter, they increased their holdings by approximately 1.24 billion shareseven before the recovery in sales in China was fully reflected in the statistics. LINE_BREACK Apple is also safeguarding its profitability at the supply stage. The company is in talks with Chinese suppliers CXMT and YMTC to purchase memory for iPhones sold in China, which could soften the blow to costs in the domestic market. LINE_BREAK However, this victory is relative rather than absolute. The memory crisis sets Apple apart from its weaker competitors, but it still drives up the companys own chip costs. So far, the company has offset this by raising pricesfrom higher costs for Macs and iPads to an expected price increase for the iPhone. LINE_BREACK There is a limit to this tactic. If Apple continues to raise prices, even loyal customers may stop buying, which would slow the growth that is currently propping up its stock price. The memory shortage could last until 2028, so cost pressures are unlikely to ease anytime soon. LINE_BREAK The next test is just around the corner. On July 30, Apple will release its earnings report, and these figures will show whether demand for premium products can hold up amid the prolonged shortage.

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