Goldman Sachs has reduced its global smartphone shipment projections for 2026 and 2027, citing a sharp rise in memory chip costs that is now impacting even the most dominant players in consumer electronics. The investment bank now expects shipments of 1.14 billion units in 2026 and 1.17 billion in 2027, down from prior estimates. The revision comes as Apple, the world's most valuable technology company, prepares to raise prices on its products to offset higher costs for DRAM and NAND memory chips.
Apple CEO Tim Cook recently acknowledged in an interview with The Wall Street Journal that the company would increase prices across its product lineup, calling the current pricing environment "unsustainable." The price hikes are expected to affect iPhones, Macs, and iPads, which rely heavily on memory components. Cook noted that while Apple is willing to use its balance sheet to secure supply, it has no plans to build its own memory fabrication plants, underscoring the limits of even the largest tech firms in addressing the chip shortage.
The memory chip crunch stems from surging demand for high-bandwidth memory (HBM) used in AI servers, which has diverted production capacity away from standard memory chips used in smartphones and PCs. Major memory manufacturers such as Samsung Electronics, SK Hynix, and Micron Technology have reallocated resources to higher-margin AI-related products, tightening supply for consumer electronics. According to IDC, this shift has reduced the availability of DRAM and NAND for the broader market.
Gartner has warned that soaring memory prices could lead to an 8.4% decline in global smartphone shipments in 2026 compared to 2025, with average selling prices rising 13%. PC shipments could fall by 10.4% over the same period. Higher prices are expected to extend replacement cycles, particularly among mid-range and budget-conscious consumers, potentially widening the gap between premium and value segments.
Apple's pricing power remains a key differentiator. The company controls over two-thirds of smartphones priced above $600 and more than three-quarters of those above $1,000, according to The Wall Street Journal. This gives Apple more flexibility than rivals like Samsung or Xiaomi to pass on cost increases without losing market share. However, the upcoming iPhone cycle will test consumer willingness to pay higher prices, especially as financing options in the U.S. and Europe may cushion the impact.
Gene Munster, managing partner at Deepwater Asset Management, told CNBC that Cook's mention of price hikes signals the severity of the issue. Munster estimates Apple could absorb some of the cost but will likely raise iPhone prices by 5% to 10%. This would mark a significant shift for a company that has historically avoided broad price increases on its flagship products.
Investors are now closely watching Micron Technology's fiscal third-quarter earnings report, scheduled for June 24. The company's stock has surged 298% year-to-date, driven by optimism around AI demand and memory pricing. The earnings call, set for 2:30 p.m. Mountain time, will serve as a barometer for the sustainability of the memory rally and the broader AI trade. "There's still a lot of juice," said Andy Pratt, director of investment strategy at Burney Company, regarding the AI sector.
Apple's March-quarter revenue reached $111.2 billion, up 17% year-over-year, with iPhone sales hitting a record for that period. The company also authorized an additional $100 billion for share buybacks, providing Cook with financial flexibility. However, the memory chip shortage poses a structural challenge that could reshape the smartphone market, with premium brands likely to fare better than mid-range competitors. Omdia analyst Zaker Li forecasts a 7% drop in global smartphone shipments this year, with high-end models remaining "relatively resilient."
