Smartphones have (and are) becoming advanced computers as the software, hardware, services and user needs mature to a point it almost are replacing the need for PCs. Applications such as AR/VR will be more demanding on DRAM in phones this year. Higher Resolution Displays, LTE all are driving need for higher DRAM capacities in smartphones. Furthermore, OEMs have been pushing for advanced hardware configurations to differentiate, win mindshare and marketshare.

Latest research from our Smartphone Memory Capacity Tracker (here) highlights that Chinese brands have been the key drivers for advanced memory configurations trend in smartphones. There is a strong correlation here to the phenomenal growth of these brands as they are getting the “Product” out of the 4Ps right and very competitive.

Vivo, Oppo, Huawei and Xiaomi have been the key brands which have been on growth spurt in last couple of years (See here) and if you look at the average RAM capacities these brands have been driving are significantly above industry average.

Smartphone Trends: Huge Memory: Huge Market Share

Oppo & Vivo leads the pack with more than 3GB average RAM across all the phones they sold in Q4 2016 up from an average of 1GB just a few years ago. The mix shift towards $200+ devices with models such as Oppo R9 (the bestseller in China in 2016 – see here) On the other hand, Huawei and Xiaomi with a mix of low, mid and high-tier portfolio have been steadily rising on the average memory bits being consumed in their phones sold. Xiaomi last year saw a dip as its sales mix shifted towards cheaper Redmi 3 models.

ZTE & Lenovo lags behind these top-performing H-O-V-X and so does many of the Chinese, Internationals and local kings across other Asian, African or Latin American markets.

• Global Average for DRAM in smartphones is hovering around 2.4 GB of all the phones sold in December 2016 (see here).
• 4GB+ DRAM smartphone sales grew more than 5000% Y/Y capturing almost 60% share of total sales in $300-$399 segment in Q4 2016.
• Overall, 3GB+ RAM now contributes to 35% of the total smartphone sales globally

While OEMs are integrating higher RAM configurations, average NAND Flash or ROM or Flash Storage capacity in smartphones have also risen significantly. The average memory capacity is crossing 30GB+ level globally with Apple alone seeing its average capacity crossing 90GB in Q4 2016.

Adding advanced memory configurations has worked for these fast-growing brands, however, this can seriously put immense pressure on the overall Bill of Materials (BoM) cost of the phone. Secondly, the memory bits have been lately in shortage as these big OEMs have raced to successfully procure and add advanced capacities leveraging their scale in turn making it difficult for many OEMs to procure these critical components. This is putting immense competitive pressure on other OEMs and seriously stunting the growth prospects in near-to-mid term.

So advanced memory configuration in smartphones has become a critical success factor for smartphone brands to gain mindshare and marketshare. It will be high on agenda for OEMs this year to design, procure and price their products with such configurations to catch up with these aggressive Chinese brands.

P.S: AT MWC 2017 and later this year look out for number of 8GB+128GB configuration phones

Feel free to reach out if you are interested in this or similar research in mobile space.