Apple, Samsung Can Absorb the Smartphone Cost Shock — Smaller Rivals May Not Be so Lucky

Counterpoint analysts said Thursday that smartphone demand weakened across both major markets, with cost inflation emerging as a key pressure point. Rising memory costs are forcing manufacturers to increase prices while consumers remain sensitive to higher costs. U.S. smartphone sales fell 5% year over year in the second quarter as higher memory prices and broader macroeconomic pressures hurt consumer demand, Counterpoint analyst Blake Przesmicki said. The pressure was particularly severe at the low end. Sales of smartphones priced below $100 tumbled 64% as manufacturers either stopped shipping some devices or raised prices to offset higher memory costs. Prepaid smartphone sales fell 11%, although Samsung and Motorola gained share as weaker competi...