We’re fast approaching the release of new hardware products from many of the world’s biggest tech companies. Apple just announced new Mac minis and Mac Studios powered by its latest M6 chips, while we’re expecting the iPhone 18 Pro and Pro Max, Apple’s first foldable iPhone, and new Apple Watch models to be announced at the company’s annual iPhone event in the first half of September.
While the Mac minis and Studios have high-quality, cutting-edge tech powering them, we’re entering a strange new world. Consumer hardware, and the technology powering the tools we rely on more and more, is starting to get worse rather than better.
One example can be seen in Nvidia’s forthcoming Vera CPU. JPMorgan says Nvidia has halved the planned amount of SOCAMM memory attached to each chip, from 1.5TB to 768GB. It has also reduced the planned HBM memory used in its Rubin Ultra systems, moving from 16-high HBM4E stacks to 8-high or 12-high versions. The bank describes those changes as “content optimization as a coping mechanism” for constrained memory supply, rather than a sign that the systems suddenly need less memory.
“To this scale, we’ve never seen anything like it before,” says Runar Bjorhovde, a senior analyst at the tech research group Omdia.
It’s not that innovation has come to a halt, or that Moore’s law—which dictates that the amount of computing power that can fit on a chip, and therefore the capability of technology, doubles every two years—has to be thrown out the window. Rather, things are simply getting too expensive to keep going as is.
A big reason is the enormous demand for memory and other advanced components from hyperscalers building out AI infrastructure. Major memory players have increasingly focused their attention and production capacity on higher-end products, where hyperscalers are willing to pay top dollar. Expanding supply isn’t quick, either. New plants can take two to three years to build, and they’re increasingly likely to be designed to service higher-specced, higher-return GPUs rather than basic components.
Those challenges have sent prices soaring. Bjorhovde says memory components now cost four or five times what they did a year or so ago. As a result, memory can now make up more than half the bill of materials in some cheaper devices, compared with around 10% to 15% before the AI-enabled price spike.
Those economics are starting to reshape the devices companies make. With costs rising so sharply, manufacturers are choosing the least harmful option for them: cutting back on components. “We’re looking at brands going back to 4G phones,” says Ben Hatton, analyst at CCS Insight, because they can get away with using less memory than in an equivalent 5G device. Others are reducing storage, fitting worse cameras, or using older generations of Qualcomm and MediaTek processors.
The effect won’t be equal across the market. High-end laptops will still need enough memory and processing power to work properly, and to justify the eye-watering prices manufacturers are asking. But at the lower end of the market, the tradeoff becomes clearer in favor of cutting component quality. “If you’re looking for a sub-$500 phone or a laptop, then yes, the likelihood is you will be getting a less powerful product,” Hatton says.
It all means the middle of the market is being squeezed as manufacturers try to persuade customers to spend more, where they have enough margin to absorb some of the massive inflation in component costs.
There are signs of that shift already. Bjorhovde, the Omdia analyst, points to Samsung’s Galaxy A16 4G, an inexpensive phone now around 18 months old, which has remained the company’s biggest-selling model by volume in Europe. He also points to Xiaomi as an example. Its unit shipments fell around 25% year over year in the first half of 2026, he says, while revenue fell only around 5% as the company shifted toward more expensive products.
The increasing cost of new devices is also pushing users toward refurbished ones, though increasingly, a two- or three-year-old flagship can cost the same as a much weaker new phone.
The issue is likely to persist for several years, both experts say. Bjorhovde thinks meaningful price declines are unlikely within the next 18 months, while Hatton expects the squeeze to last until at least mid-2028. “This is not a short-term issue,” Hatton says. “This is quite a significant structural, almost systemic issue that’s really changing the way that we are probably going to use and consume tech more broadly going forwards.”
