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In the Dwarkesh podcast with Semi-Analysis's Dylan Patel they forecast the phone market will shrink by 50% this year because of RAM prices: But that’s the high
by nl 7mo ago
In the Dwarkesh podcast with Semi-Analysis's Dylan Patel they forecast the phone market will shrink by 50% this year because of RAM prices:
But that’s the high end of the market, which is only a few hundred million phones a year. Apple sells two or three hundred million phones annually. The bulk of the market is mid-range and low-end. It used to be that 1.4 billion smartphones were sold a year. Now we’re at about 1.1 billion. Our projections are that we might drop to 800 million this year, and down to 500 or 600 million next year.
We look at data points out of China from some of our analysts in Asia, Singapore, Hong Kong, and Taiwan. They’ve been tracking this, and they see Xiaomi and Oppo cutting low-end and mid-range smartphone volumes by half.
Yes, it’s only a $150 BOM increase on a $1,000 iPhone where Apple has some larger margin. But for smaller phones, the percentage of the BOM that goes to memory and storage is much larger. And the margins are lower, so there’s less capacity to even eat the margins. And they have also generally tended not to do long-term agreements on memory.
Why this is a big deal is that if smartphone volumes halve, that drop will happen in the low and mid-range, not the high end.
- zozbot234 7mo agoSmartphones are widely available on the used goods market though, perhaps even more so than second-hand SBCs or old PCs. The "low and mid range" can be filled by the former high end.
- ethbr1 7mo ago> The "low and mid range" can be filled by the former high end. With the 4-7 year support window on Android? Maybe that's why Google is trying to kill off Graphene et al.
- TheScaryOne 7mo agoMy Samsung Galaxy S3 died after 8 years. EMMC failure. Just started boot looping while I was asleep. Everything gone. Known issue. My Samsung Galaxy S8 died at 7 years. Some kind of thermal failure, I was able to recover my data by keeping the phone in the freezer while I copied. Known issue. My Samsung Galaxy S21? I figure I've got another year or two in it before it, too, dies. Having beautiful dead phones that have never had a broken screen or a hard drop is pretty depressing.
- sureMan6 7mo agoI bought a used Samsung and it started boot looping almost immediately, all these issues seem very specific to Samsung
- Joe_Cool 7mo agoI am noticing something those devices have in common. My Galaxy Tab also has dead EMMC. My HTC One M8 still works and even holds a day of charge. Too bad Android doesn't support 32bit ARM anymore.
- pseudohadamard 7mo agoIt can also depend on the hardware it's connected to. If the endless gigabytes of Samsung's value-add software are scribbling to eMMC nonstop then it's not surprising the flash is wearing out. A lot of this stuff is masked by the fact that most people swap out their phone for a new one that's exactly the same every 12 months so they never notice this, but if you hold onto a phone or similar device for longer the unnecessary wear starts to add up.
- TheScaryOne 7mo agoThe S3 ran Samsung software for about, oh, a month after I bought it brand new? I'd been running CyanogenMod until they quit giving updates to the S3.
- christianqchung 7mo agoIf you're not a phone power user, you can get by on old low end stuff. When my pixel 4a died of a bad screen crack a couple years ago, I replaced it with a random used 4a on ebay for $80. Two years later and it's still completely fine for all my purposes (texting, phone calls, chrome browsing, tolerable camera, etc.), although I still haven't accepted google's deal for a free battery swap yet from sheer laziness. I've learned that I can accept a 90 minute screen-on phone battery, though it's an odd adjustment to make. Again, not a power user.
- jy14898 7mo agoThe free battery deal ended in January, but you're likely better off as mine ended up getting a damaged screen while being transported for mail in (because all local stores stopped doing the program), and they wanted to charge me an extortionate price to fix the screen. Support were useless
- DeathArrow 7mo ago>Smartphones are widely available on the used goods market though, perhaps even more so than second-hand SBCs or old PCs. The "low and mid range" can be filled by the former high end. When new cars got more expensive, used cars got more expensive, too. I expect the same to happen with the phones.
- throwatdem12311 7mo agoMy iPhone 11 hanging on for dear life…
- jmyeet 7mo agoI had an iPhone 11. It was a good phone. It started giving up in early 2024. I held on with poor battery life until the new iPhones that year and bought the 16 Plus. I'm glad actually because they're discontinued the Plus models, annoyingly. But I'm glad I don't need to upgrade for the next couple of years. I honestly want to get 4-5 years out of any phone going forward. There's basically no difference between models 12 months apart. I can see the prices going up this year. IT's already happened to the PS5, which is bascially unheard of. It really sucks more because the reason for it--AI--is just so godawful and pointless.
- nl 7mo agoI had an iPhone 12 and just upgraded to a 17 because I don't see any point waiting - prices will just increase. > It really sucks more because the reason for it--AI--is just so godawful and pointless. Strong disagree. AI is the best thing I've seen in 30 years working in software and expensive RAM for 2 years is a price I think is worth it.
- tombert 7mo ago> AI is the best thing I've seen in 30 years working in software and expensive RAM for 2 years is a price I think is worth it. I think generative AI is pretty neat, but I'm not sure it's worth the RAM increases. I use Claude like everyone else does, and it's cool, but I am a little concerned at how much absolute low-effort crap is being produced with it. It has made YouTube considerably worse; there was already a lot of low-effort shit flooding it, but now it's almost cartoonish. A lot of the videos that I'm recommended will have thousands of views, and give kind of a facsimile of a video with "effort", only for me to realize about a quarter of the way through a bunch of AI tropes in the writing and/or the visuals. It has made the already-mediocre experience of YouTube actively bad. I am also not convinced that the prices will go down after two years. We already have big memory vendors completely leaving the consumer market, and we have these AI companies buying literal years worth of entire production lines of RAM chips. This is something that could be solved by competitors jumping in to fill the niche, but it takes a lot of time to build new factories for this stuff, I think more than two years.
- reenorap 7mo agoThis is an extinction event for the low-cost cell phone companies. How are they going to survive if they can't sell their $100 phones profitably for 2 years? I think many of the low-end companies will simply sell their allocations of RAM and close up shop.
- alsetmusic 7mo agoThis is my greatest concern. So many small players will be wiped out. Consolidation is assured. Always great for consumers to be under the thumb of increasingly large companies.
- pseudohadamard 7mo agoWill it be such a big deal though? Currently people are swapping out their phones for another model that's exactly the same but with a different number at the end of the name every 12 months. This could just mean that the unnecessary churn dies down a bit, and companies taking advantage of it have to find a new line of business.
- lelanthran 7mo ago> Will it be such a big deal though? Currently people are swapping out their phones for another model that's exactly the same but with a different number at the end of the name every 12 months. I don't think they do that at the low-end (nor the high-end, though that doesn't matter here - higher-end manufacturers have a small margin they can eat into). People on the low-end phones want a new phone, they just cannot afford it!
- jeffreygoesto 7mo agoBut why? I just replaced my Huawei P20 after eight years and only because nobody cares about app sizes and compatibility.
- crote 7mo ago
- fpoling 7mo agoI wonder if manufacturers opt to install less memory.
- consp 7mo agoOr optimize the os because I still find 8GB insane for everyday tasks. Ok, gaming I can understand, but most common tasks should be runnable with at most 2GB of memory and that is mostly for browsers.
- izacus 7mo agoOptimizing the OS won't do anything about shrinking sales when the spec sheet changes.
- 21asdffdsa12 7mo agoIts going to be interesting, when big the big AI bubble directly attacks via pricing the government by preventing the sale of surveillance devices. So the bubble will pop- not because it can not sustain, but because its existence is adversarial to government demands for surveillance.
- joe_mamba 7mo agoGovernment will bail out the big tech companies related to the AI bubble when that pops, that's why they're all massive donors to TRUMP INC.
- sandos 7mo agoI would not call any Apple phone even mid-range, and certainly not low-end? This coming from an android user, that recently bought iphones for my daughters. Paying 600$ for not even top-of-the-line phones does not scream low-end to me.
- dhruvmittal 7mo agoMy company-provided work phone is a base model iPhone, I'd definitely put it in a performance class lower than a flagship from any brand. Certainly not low-end, but I think mid-range would be a fair characterization.
- twobitshifter 7mo agoWhen it becomes clear that the insanely expensive AI data center orders are not going to be filled, we can expect a huge reversal in the price of RAM and GPUs. There are 241 GW of orders on the pipeline but only a third of that is under construction and of that third, even less is being quickly finished and brought online, It’s estimated that just 3GW came online last year. https://www.wheresyoured.at/the-ai-industry-is-lying-to-you/ https://www.wheresyoured.at/the-ai-industry-is-lying-to-you/
- gwerbin 7mo agoDon't count on it. There's a lot of money in killing other businesses, or even just keeping prices high. Even if the high prices are an accident, there is always someone looking to take advantage of any situation for profit.
- nutjob2 7mo agoI have to agree. You only have to look at car and junk food inflation from after covid. The prices make no sense, but that doesn't matter, they got away with it and are fighting to hold onto high prices, even as consumers balk. Their solution? Ditch poorer consumers. New cars and (branded) junk foods are luxury items now, apparently.
- selimthegrim 7mo agoSomebody needs to redub this with Hanoi Hannah from that video game as the voice of the AI industry.
- surcap526 7mo ago[dead]