Memory efficiency: Apple’s new competitive advantage

Artificial intelligence (AI) has opened up a new can of worms for the tech industry, with memory prices increasing rapidly as demand grows. In response to these increased costs, manufacturers will be forced to raise prices on their products, making for more expensive smartphones, computers, and more.

It’s a bigger problem than you think. Because while AI means we need more server-side memory to drive all those generative AI (genAI) cloud services, it also means we need more AI in the devices to handle edge intelligence queries.

Making more from less

Apple has always been reluctant to insert too much memory into its devices. The company has regularly argued that it makes more sense to optimize hardware and software to deliver the best possible performance, rather than simply throwing vast quantities of memory at problems. 

That’s why even as recently as 2023; iPhones shipped with just 4GB RAM inside. When AI truly hit the market last year, Apple doubled that to 8GB and now places 12GB memory in its highest end iPhones. 

While those memory levels are still lower than the quantity of RAM installed in similar smartphones, Apple’s systems are more efficient. It means that they can generate more computational performance for the same memory than competitors, and means an Apple Silicon iPhone can easily handle on-device AI, as well as multitasking — all with decent battery life. 

This extends to Macs, which also use Apple Silicon. 

Computers with better designers

As a result, Apple is a little less exposed in the coming memory price war than its competitors. Where other smartphones might carry 24GB of RAM, their performance is usually matched by an iPhone with half that. 

That’s not simply a happy accident; Apple’s systems are designed that way. (Design isn’t just how it looks, but also how it works.) If you think about it, one of the benefits of Apple’s historical disadvantages in PowerPC and then Intel processor performance is the company needed to figure out how to get more performance out of fewer computational resources.

That’s less of a problem with Apple Silicon, but a cultural preference for optimization supported by innovations such as Unified Memory is deeply woven into Apple’s DNA. The company has gotten used to squeezing out more from less.

Flogging the horse

Historically, critics and competitors have pretended to be blind to Apple’s approach. Rather than consider things like relative performance benchmarks between their chosen platform and Apple’s, they have insisted on pointing to the quantity of installed memory — ignoring iPhones or Macs that achieve near equal or (now) better performance on what is there. 

While it is true that Apple has made memory its Achilles Heel, mainly by charging way more than most for pre-installed extra RAM and failing to make memory a user upgradable component, what it achieves with the memory it does install is now a competitive advantage as RAM prices rise.

Feeling the pressure

The demand for more RAM inside devices means even low-tier manufacturers will need to put more of it inside their smartphones, tablets, PCs, and everything else – and the companies and products most exposed to this will be those less able to purchase memory in vast quantities in advance.

Smaller vendors will be pressured on manufacturing costs from below, even as they’re forced to compete more fiercely for sales at the more lucrative parts of the mid-range market (where Apple is now fighting, too). The company already plans lower-cost Macs and iPhones next year.

Looking at the impact of memory prices, Counterpoint Senior Analyst Yang Wang recently said: “Apple and Samsung are best positioned to weather the next few quarters, but it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins.”

Siri’s chance to laugh last

These advantages apply even if Apple must negotiate new long-term supply deals for the component next year. There are few willing to reject the kind of money a memory supply deal for Apple’s products can generate, and even if cost does increase, that economy of scale — combined with Apple’s ability to squeeze more performance from less memory — gives the company a buffer. Indeed, if Apple manages to constrain any price increases in the next 12 months, its products can only end up seeming to be an even better value than those you can obtain elsewhere. Not only that, but thanks to Apple Silicon it also seems set to deliver devices increasingly capable of running AI at the edge, a privacy-protecting story enterprise users are searching for. And they’re likely to power the upcoming private-by-design Siri.

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