DRAM pricing is killing the hobbyist SBC market
jeffgeerling.com629 points by ingve 4 days ago
629 points by ingve 4 days 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.
This 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.
This 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.
Are there really that many small players? Aren't they all just subbrands of Xiaomi, Lenovo and Oppo?
There are a bunch of subbrands but there are also a lot of genuine small Android phone companies, especially in China.
Some of these serve some interesting niches that might now disappear due to this DRAM supply issue, e.g. Unihertz for extra small phones or CAT for extra durable worksite phones.
Is there any 'guide' to this ecosystem...because 'odd niche communications gear' is always interesting.
Is it a coincidence that Oppo sounds a lot like how Chinese people sound when they say Apple?
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. 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.
> 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!
Even in the mid-end: If you buy a phone which you find to be decent, but affordable, and are not out for chasing the latest gimmick - there is no reason it would not last you 6 or 8 years easily - before applications start assuming the presence of better hardware, or a newer Android version than you have etc. Naturally you will have to protect it from physical damage, and maybe replace a battery at some point.
But why? I just replaced my Huawei P20 after eight years and only because nobody cares about app sizes and compatibility.
Because the phones stop working well? I write part of a post, open another tab to go look up some information, come back to the post and what I've written is gone, because the memory got dumped. That's the reality of using an old cheap phone.
And would you consider yourself representative of the phone-buying public in general?
My desktop PC is from 2008 but I'd never consider this to represent anything like common usage. In fact it's so unusual that I get to point it out in posts like this.
You just answered your own question.
There's also the issue of phones occasionally getting broken, of course.
This comment makes no sense to me. I exclusively use very low-end phones from Xiaomi. I buy a new one roughly every two years. Each new phone has a better screen, camera, CPU/GPU, charging, and sometimes more RAM/storage.
Take a look at a comparison of the iphone 17 and the iphone 12
https://www.apple.com/iphone/compare/?modelList=iphone-17,ip...
Is the newer model better? Sure!
But it had 4k 60fps video, optical image stabilisation, a "super retina display" etc five generations ago. The specs have kept improving, but it's not a quantum leap in performance.
iPhone 12 wasn't low end
The same applies at the low end, the grand parent comment even agrees.
You buy a new phone every two years, it comes with a camera, a cpu, a gpu, a host of sensors. Same as phones did two years ago, and ten years before that.
I don’t use my current smart phone in any ways that are different to the iMate PDA2K I had twenty years so.
How often does your browser freeze up when you open a webpage? How often does your phone browser dump its memory when you switch to another tab and then switch back? Eg if you were writing a post and opened another tab to go check some fact then the post in the original tab gets deleted.
Because that's what happens if you use an old cheap phone in the modern day.
I even had a phone that would occasionally just crash when on a heavy website and the onscreen keyboard popped up. That was not at all infuriating!!! Especially when it would crash when I try to refine a Google search.