In preparation for this year’s major launches — including the Apple Watch, iPhone 6s and iPad Pro — Apple might be bulking up on one crucial component that might otherwise be in short supply later this year, according to some research notes flagged by Barrons.
Apple is expected to increase RAM in its upcoming mobile devices and that’s why it’s trying to secure enough supplies to prevent shortages from hindering its device launch plans. Summit Research analyst Srini Sundararajan says that the next-gen iPhone might ship with 2GB of RAM on board, and the Apple Watch should have 0.5GB of RAM. More interesting is the amount of RAM the analyst quotes for the iPad Pro — according to him, the bigger 12-inch tablet is “likely” to use 4GB of RAM.
Apple isn’t the only company seen increasing RAM memory in smartphones and tablets, as LG and Samsung are also increasing RAM content per phone, the analyst said.
RBC Capital’s Doug Freedman, who just issued an Outperform rating for RAM maker Micron, also believes that RAM demand will significantly increase in the second half of the year.
“We think the Street expectation is that the ‘6S’ AAPL smartphone could ship 1.5-2GBs (or more) of DRAM in the smartphone, so not only is [Micron] losing unit volume, they also experience less of the impact from increased content,” he wrote. “AAPL will be at 1GB DRAM/ phone for most of the year as they will sell 6/6+ until late September. We estimate that AAPL could sell 60-70mil “6S” units from October-December. So that means that if AAPL sees a 1 GB increase in DRAM and assuming 95% of units are next-gen, that is 65mil more GBs of DRAM (65mil units x 1 additional GB). Total AAPL content would be 130mil gigabytes of DRAM assuming 2GB/phone. Samsung handling ‘at least half’ would be 65mil gigabytes of DRAM content. The magnitude of the shift does not seem to justify the decrease in stock price.”