Here’s a fun economic puzzle: what happens when a key component for making stuff gets more expensive, but people aren’t really buying more of that stuff? In the smartphone world, the answer appears to be: you start making fancier, more expensive versions of the stuff.
According to a new report from Counterpoint Research, rising memory costs are reshaping the OLED industry in 2026. This isn't just a minor supply chain hiccup; it's forcing giants like Apple Inc. (AAPL) and Samsung Electronics Co. Ltd. (SSNLF) to play a different game. The strategy? Pivot hard toward premium devices and new form factors, like foldables, to navigate the pressure.
The Smartphone Squeeze
Counterpoint said on Tuesday that it expects global OLED shipments to remain flat this year. More specifically, shipments of OLED panels for smartphones are forecast to decline 3% year-over-year. The culprits are memory cost inflation and broader component pricing pressures.
Think of it this way: the rising cost of memory chips is hitting the heart of the phone market—the mid-range and entry-level segments—the hardest. This is pushing phone makers, or Original Equipment Manufacturers (OEMs), to rebalance their portfolios. They're pulling back from the cheaper, more competitive end of the pool. This shift is reducing demand for rigid OLEDs (the kind in many standard phones), while demand for flexible OLEDs remains flat. Overall, expectations for smartphone growth have been revised down.
The Premium Power Play
So, what's a trillion-dollar company to do? If you can't sell more volume, you sell better, higher-margin products. Counterpoint highlights that OEMs are now prioritizing these devices to offset their rising costs.
The poster child for this shift is the foldable phone. Foldable OLED panels are still projected to grow by a hefty 34% year-over-year in 2026, though that's lower than prior estimates. This growth is being driven by a major new entrant: Apple's upcoming foldable smartphone, plus new models from Samsung and others. It's a classic move: when the going gets tough, the tough release a $1,800 phone.
Apple is also accelerating its OLED adoption in another high-margin category: notebooks. The rollout in MacBook Pro models is helping drive growth in premium IT segments, where the higher average selling prices can more easily absorb these component cost pressures. If you're going to pay $2,500 for a laptop, an extra $50 for a nicer screen isn't going to break the deal.
Where The Growth Is Hiding
With smartphones under pressure, growth is popping up elsewhere. Counterpoint expects much stronger growth in IT OLED applications. Monitors are projected to grow 45% year-over-year, tablets 13%, and notebook PCs 33%, partly fueled by the trend toward AI PCs.
The automotive segment is also expected to grow, but forecasts have been lowered. Even carmakers aren't immune to the ongoing component cost pressures and a somewhat softer production outlook.
In early trading Wednesday, Apple shares were down 0.03% at $258.75.
