The Rundown - Apple Is Gaining an Unexpected Edge From the AI Boom (Ft. Nabila Popal)

Episode Date: October 5, 2026

The AI boom is driving up memory prices and putting pressure on the smartphone industry. But could the crisis actually strengthen Apple’s position? IDC senior research director Nabila Popal joins Zaid Admani to explain why cheaper phones are taking the biggest hit and how Apple could capture a record share of the market. They also discuss the pricing strategy behind Apple’s new foldable iPhone Duo, whether consumers will pay $2,000 despite its compromises, and why selling out might tell only part of the story.

Welcome back to the rundown, interview edition. Today, I am talking to Nabila Popal, a senior research director at IDC, which is one of the top firms tracking the global smartphone market. The smartphone industry is having a wild year. IDC expects phone shipments to fall almost 17% this year, the biggest drop on record, mostly because AI data centers are eating up all the memory chips and making phones way more expensive. And yet, somehow Apple is still growing.

So in today's conversation, we get into what's happening in the smartphone market, why Apple has been holding up better than the rest of the industry. We also talk about the demand for the iPhone 18 Pro and what to expect for the iPhone duo. This was a really fun conversation for me. It was fun nerding out about the smartphone market. I think you guys are going to enjoy it too. So let's get into it. All right, guys, today we are talking to Nabila Popal, the senior research director at IDC. Nabila, welcome to the rundown.

Hi, hey, thank you for having me. I'm excited to be here. I'm super excited for today's conversation. You know, I'm a gadget nerd. And you study smartphones for a living, the smartphone market for a living, which is really cool. So I got to ask before we really dig into everything. You know, your job is to forecast the industry where things are headed. And right now with AI and memory prices and now foldable phones, like, is this the most eventful year in a long time? Like, what has it been like right now? I'm sure it's probably seeming like, yes, it should be, right? Because there's so much going on, all the things you mentioned, AI, foldables, and the memory crisis.

Definitely in terms of negativity, we have not seen the memory crisis trumps any other challenge we've had, whether it was, you know, from the pandemic or the tariffs or the supply chain disruptions. But, you know, given all the other things I mentioned that span the last five years, things have always been interesting and exciting. And you always seem, it seems to be like, oh, my God, this is, you know, going to be a challenging quarter and the next quarter, we have another massive, whether it's a global event or, you know, there's just so many things or technology innovation. So definitely an interesting space to be in, and I'm excited to talk about it and, you know, deep dive into whatever you want to discuss.

Well, you make a good point. The last 18 months must have been crazy, right? Because the tar up stuff, I remember when that was happening where there was news of like Apple flying in jumbo jets worth of iPhones into the U.S. and all that stuff. So I totally forgot about that. So yeah, it's probably been really fun for your job. So let's talk about the smartphone market right now. I saw that IDC is forecasting global phone shipments to fall around 17% this year, which is the steepest annual drop on record. So is this just because of higher memory prices?

Like what's dropping, what's causing a huge drop right now? So yeah, absolutely it is because of the memory crisis. But just to put things in perspective, right? So we've been, obviously, we track the overmarket. That's what I do for living as well. It's not just me, right? My whole team. We have a team of like 80, 100 odd analysts globally.

So as well as a very strong supply chain team research in China. So we've been on top of this memory news that has been, didn't make as much of the news until recently, right? But we've been trying to get so since late last year, just to give you a dimension of how rapidly the outlook chain. So our forecast last November, so end of 25, was showing up minus 1%. We're like, okay, this is coming. It's probably going to drop the market.

by 1%. By December, we did a scenario analysis of most likely 3% drops or change, and then worst case, 5%. By February, it went down to. So it was, I'm just trying to show you, right, like how rapidly the market and the situation was changing. And the memory was becoming a bigger and bigger issue. And we just kept seeing the numbers in the supply chain across all the OEMs and also memory prices keep on skyrocketing. Right. So that was what was driving the decline. And memory prices increased, I mean, cumulatively now, almost 400% since last year. But to get to this 400% year on your increase, like in December, we're looking at like 100% increase. Like, oh, my God, this is going to cause a 1% drop or, you know, 5% drop.

Worst case if things don't stabilize. And then it increased another 100% sequentially in Q1 of this year. And then another 50% to 60%. Obviously, I'm giving you, you know, averages. But so those are the kind of things that really put the market in a damper. because 370s a million devices of the $1.2 billion that was, you know, last year units shift, are below $250 devices. So with memory prices skyrocketing, that part of the market is essentially, right, you know, it's what, 20, 30% of the market that's facing existential crisis. So it's the lower part of the market that's taking the biggest hit because I was also looking at the numbers for Apple, right?

which is what I really want to day into, they shipped 55.7 million iPhones in the second quarter. That's up almost 15% from a year earlier. So they don't seem to be that impacted. In fact, they're still doing great. Like, how do you explain that? Yeah, exactly, right? Sometimes it's like, okay, is the world fair? Like, what's going on, right?

The rich keep getting richer or the premium part of the market is still growing. And, you know, obviously there's a lot of reasons to that. I mean, I make a joke about the fairness of it. But it is not just Apple, but a lot, but the premium part of the market, which also what we had forecasted and, you know, alluded to since the crisis began is that the premium players like Apple, Samsung, Huawei are going to be more shielded from this crisis for two, three, you know, for a few reasons. One is because of their scale, they're able to navigate the supply chain. I don't want to use the word control, but they're getting preferential treatment, right? for the supply chain and also given that the memory players are limited in terms of because it's just backtrack a bit of three of them right is SK-highnix Samsung and Micron

exactly so given that they are I mean there's a few more but the major players are these three right given that their capacity and their output of memory is limited and now we have this big you know I don't want to call it the AI monster by the AI industry that's gobbling up those memory chips that is more profitable for them so if I am a memory place player, right? And just obviously they, you want to prioritize your higher profit margin products. And so they are prioritizing towards HBM, which is AI memory, right, which is what's used in AI data centers. And that's why the smartphone players are scrambling for whatever is left, whatever the memory players are willing to cater to the smartphone industry is now

shrunk. And therefore, within that, obviously they're going to prioritize the biggest and baddest, right? So which includes, so that's players like Apple, Samsung and others who might not be shipping large volumes of smartphones, but they have scaled because of their other businesses. So like Lenovo, Huawei, who, you know, purchase a flight of smartphones, large memory chips. So those are the players that are getting priorities. So one that gives them the supply becomes guaranteed, right? Even if at higher prices, because even if you're a small player, even if you're willing to pay high prices, you're just not going to get a callback from the way. You're at the back of the line. Like, no one's calling you back.

Yeah. Literally, people aren't getting called back. Yeah. I mean, so, so, so I, that makes sense and why, like, the, the bottom part of the market has fallen off. It seems like Apple and Samsung and some of the top players are able to, to navigate it better. But, I mean, one of the, one of the effects of the higher memory prices is that Apple is raised

prices of their, other iPhone 18, uh, pro, which just came out, you know, less than a month ago. They raised it by $100. Some people thought that it was going to go up by even more. Are you surprised that it only went up by $100? And I mean, if memory prices are up by 400%, I mean, is Apple eating those margins? Like, what's going on here? So, you know, when we say that like memory prices have gone, first of all, you know, we were one of the people, right?

I just not to say they were wrong, but the entire industry did assume that likely Apple will be aggressive because, you know, that Apple's industry renowned for their margins, right? And that they've already be ahead on their margins. And it's the, yeah, what even though memory prices have gone at 400% because Apple is operating under quite healthy margins to begin with, right? So it's not that suddenly they're going to get priced on because of the memory, unlike the $200 smartphone players or $100 smartphone players who the memory is now costing $150 or 120. So they're not, you know, they still have room. They still have cushion within their, you know, massive margins or healthy margins. So that's one. And two, they are also really aware that this is a massive opportunity.

This is a year where they can gain significant share. And that's what also we're forecasting, that Apple is going to hit the highest record high share of 24% this year. So they want to take, you know, as you can, like from the consumer perspective, right? And who's buying, let's see a premium Android device. Suddenly, if the gap between an Android, whichever brand and Apple becomes lesser, they're going to be more inclined to jump over to Apple. So they are very cognizant of that opportunity.

and therefore, I think, we think they're being extremely disciplined as far as their pricing pieces. And even with the duo, and I know we'll get into that. But yeah, before we talk about the duo, I'm curious. So you think that the 18 Pro, they're pricing it aggressively because they're trying to get some of the users of high-end Samsung or other Android phones to make the jump over because the gap, the price difference is actually shrinking. Yeah, or at least they don't want to expand it, right? And especially, you know, that that's a big, definitely a big driving factor. Again, from our opinion, right? We do think the more the price gap increases.

Of course, you know, premium players are at any way more resistant to price increases. It doesn't matter as much. But still, right? It does make a difference when you're considering different brands. I'm not going to lie, though. When I first saw the 18 pro again, I'm a gadget nerd, I follow this stuff. All that's like, you know, just from a consumer perspective closely, I thought that I, my opinion that it might struggle because like the 18 pro looks very similar to the 17 pro.

There's no like breakout features. It's $100 more, right? So I guess it might incentivize people to not necessarily upgrade to the 18 pro. Maybe just stick with the 17 or get a get a cheaper 17 pro. So I guess that that was my perspective, but it seems like you guys are more bullish on it. So it's not that, you know, of course, if they didn't increase the price, the demand would be higher. The thing is that they also increased the 17 prices. So anyone who's in the market right now is going to face higher a baseline price of all

the Apple devices, right? And let's remember someone who is out to buy a device. Most people aren't upgrading every year. It's someone who has a 15 or weirdos like me are doing it every year. Right. Yeah, and possibly me too. So I'm really definitely rocking the new 18 for a max, which I love the color, by the way, if you can tell.

It's a nice color, yeah. So, yeah, so, you know, back to the price difference, it is definitely to stay more competitive. But if you look at what they increased, the reason, like one of the reasons why we had projected a higher price increase, so we were, and I publicly said that across a lot of media and whatnot. But even internally, in our assumptions, we'd expect that Apple to increase the Pro Max, the Pro series by $200. So it came, you know, half of that. So we were really impressed with the discipline that Apple showed, especially if you think about the amount of increase they put on the max and the iPads, right? Anywhere up to 30 to 50 percent, 30 to 50 percent. So we thought, you know, they'll go aggressive here.

But it seems like, you know, with their biggest revenue driver, they were a bit more careful. Yeah, I bought an iPhone air earlier this summer. I timed it perfectly right before the price hike. So I'm so happy that I pulled the trigger on that. Okay. So I want to talk now about the iPhone duo, right? Like that's the sexy new device. It's coming out in a couple weeks now.

Pre-orders go live in a couple weeks. So by the end of the month, it should be for sale. How do you see it selling? Because I've seen wide estimates. Like some people think it's going to be huge. Others think that it might not be such a huge hit because of, you know, what we saw with the iPhone Air last year where it was a new design, but it didn't sell so well.

This is what $2,000, which again came in under what most people were expecting. I thought it was going to be like easily $2,400. because that's what Apple does. They price at the top end. They came in under 2000s. I was shocked. So where do you see the iPhone duo? How do you see it doing?

Yeah. So first, just to address, I don't ask about that, but the shock, right? We were also extremely shocked with the introductory price of under $2,000. And I think that is, you know, to comment on that because it is definitely worthy of, you know, commenting both from a strategic point of view as well as capturing headlines, right, from a marketing angle. They got the headlines that, oh, wow, the job. duo is under $2,000.

But in turn, you know, behind the scenes, well, not behind the scenes it is there, but it's not capturing the headlines. The higher storage and the higher configurations are going to touch that $2,400 and above even the around $3,200 for the higher storage configuration. So it's, you know, it's really playing it smart, right? Capture the headlines with a low baseline. And then knowing that someone who's buying and a consumer who can spend that much, we'll most likely get something of higher storage.

And then to another point in the pricing is that that's a U.S. price, a lot of their international markets are even higher. So, you know, again, capture the headlines with the announced price, launch price in U.S., and then international markets, they're kind of making up for that. We've seen large differences in that. I'm kind of curious about the international market, right? Because, I mean, you know, I live in the U.S., so I don't really see foldables very often here. But, I mean, I hear they're very popular in China.

In fact, you were in China recently. I saw your LinkedIn post and you compared the iPhone duo to some of the other Chinese smartphone makers, the Huawei and the Xiaomi foldable. And you said the Apple hardware just felt more premium to you. So do you think Apple made the duo specifically to target the international markets, especially in Asia and countries like China? So two things, right? Well, foldables have always been a niche segment, right, despite so many different brands

in there and fantastic devices by all of them, right? Like very innovative, et cetera, be the Huawei's, Chamis or Samsung, right? China is the largest market for foldables. So it contributes to about 60% of foldable volume. And we all know how important China is to Apple, right? Yes, they took their time. But they, I don't, you know, no one will say that they wanted to always give up that, you know, that revenue or that segment of the market to their competitors. Right.

So now they're in the game. Late, you know, better late than never. And as always in typical Apple fashion, you know, when they enter, you know, they start the party, right? if you want to use simple analogy, right? The foldable market had kind of, the steam had cooled off. We were expecting if it was just Android, it would have seen actually a decline

because the greater growth for foldables had slowed down. Anyone, and this is, you know, what we seemed like anyone that really wanted a foldable that was in the Android camp, pretty much bought one, right? So that's what tells you of a maturing market. It's eight years in,

growth rate went from single, down to single digits. And this year, it would have actually declined. But now with Apple entering, the mix of foldable market as a whole is going to grow by almost 13 or 12, 13 percent. So double digit growth. So shows that they are really giving new life to a stabilizing category. But back to, you know, what Apple like demand in the whole market, right?

U.S. The only real player at Foldable was Samsung, right? Now, as a consumer, you know, where there's some consumers that will never go to Android camp almost, right? And so those. This guy right here, me. I'm locked into the Apple. ecosystem. My wife wants an iPhone. I'm not switching. It's never going to happen. Yeah. And so there's so many, you know, whether, you know, not to be critical of the end of what

Android phones are capable of doing. But this is why Apple, that ecosystem lock it, which is why we hear news like, oh my God, this feature is amazing. And Android or Apple critics are like, we've had this forever or whatnot. Right. But in our universe or in the Apple, you know, ecosystem or consumer universe, it's new. And they're excited, which is the similar excitement that the duo is going to bring, because someone who never considered a foldable, I don't need it, who was, you know, an Apple, suddenly is like, oh, what is this? This looks cool.

I want to try it. And then they're the smaller segment of consumers who, you know, were only Apple, but they liked the foldable, but they didn't want to make a switch. So it's going to capture those consumers. And, you know, in the U.S., Apple has already, in terms of the full smartphone market, the total 50% share. So there's a lot of consumers there that, you know, have been reading. And we did a survey that asked consumers, okay, you know, are you interested in foldables and would you buy one?

And it was kind of lukewarm response. But then we asked, of course, you know, we designed these surveys. So we know what to ask. If Apple made a foldable, would you buy one? And 30 percent, over 30 percent said yes. Wow. Well, I'm really curious to see how it's going to sell because, you know, the price, I mean, it is still $2,000. Yeah.

Some consumers aren't going to care. They'll buy it. And I think the other problem is that there's still some compromises that were made on the device, right? Like it doesn't have the best cameras. I mean, I'm curious to see what the reviews have to say. But I think things like that matter to like high end, high end consumers. Like I might be hesitant to buy the duo if it really doesn't have the absolute best camera because I need the best camera. That's one thing that I absolutely need.

So I'm really curious to see if those compromises end up hurting Apple because, you know, you can make the case. That's what happened with the air. The air, every time I see it and like touch it, it feels so amazing. But the battery life is terrible and the cameras aren't the best. So maybe that's what led to lower sales. True. And those are definitely the concerning points, which they have addressed, I think, in the air, too, that will be coming up soon in the spring, right? But on the duo, you're right, there are significant compromises, right?

But it's about, like, the give and take. Do you really want the foldable? Do you want the latest and greatest from Apple? And you might be sacrificing on a few, not just camera, but also battery, which is very important. But the third is, like, face ID. You know, you think that we've kind of gotten used to face ID. where it's just, it's, it's synonymous to a premium product. So I'm going to spend $2,000 and not have face ID.

Yes, that might pinch some people, right? But those who are interested in the device, I don't know. Again, we'll see, right? How it does. My assessment, my personal assessment is that it's going to fly off the shelves because it's going to create those headlines where, you know, out of stock. But simply because, I don't say simply because. because obviously it is a great product too,

but also a lot has to do with the exclusivity and the limitation. It's going to be in very limited supply. And that helps create the buzz, I think, and make it, you know, because what defines success if it's flying off the shelf, but then if you only make a, you know, limited volume for various reasons, I'm not saying it's intentional, but, you know, the supply chain challenges and component challenges with making more, you know, because of that.

And also internationally, right? Apple, the Apple brand name, you know, is very strong. And so, you know, it's become the fact that it's their highest price device. It's going to be an instant status simple to those consumers, right? That wants to show up. And that, don't undermine that. No, I did.

You're absolutely right. I'm not telling you. I'm just saying, like, let's, you know, we should, uh, it seems silly when you're really so much into tech as we are. We know the details. We know the specs. But the average consumer is a lot simpler than that in consumer psychology, which is why like the color orange.

I mean, personally, for me, like last year, it's so well and drove so much. It's just a color, right? So why? It doesn't mean, I mean, obviously, it stands out. It stands out so that people can show off. I have the latest iPhone, you know? I personally did that color analysis, but I knew that, you know, there's enough consumers that have that that psyche.

Okay, it's instantly, you know, from far, you can see this person has the latest iPhone. So which makes a difference. Mark is like China, which are very, you know, big on that as well as India. Absolutely right. That's a good point. I'm really curious to see what the sales number looked like. I have one last question for you. You know,

you mentioned Apple and their dominance in the smartphone market, especially in the U.S., but now we're starting to see some challenges potentially from open AI. They're talking about smart devices, meta's going out with the smart glasses. They have their own little smart device that they showed off a few weeks ago, a couple weeks ago. Is any of this going to be a real threat to smartphones and Apple specifically?

Personally, I think that the smartphone is like it's never going to disappear. It's always going to be the dominant device. But you know, you talk to some other people, they're like, no, we're all going to be wearing smart glasses instead. And I just don't see it, but I'm curious to get your take on it. My personal take is I don't think the smart glasses, which is to some degree seen. And I know they're, you know, getting better incrementally, like, you know, launch after launch in terms of weight and lightness. I don't think the smart glasses are going to take over the smartphone. Is there going to be a brand new device that, you know, completely that we haven't thought of that might take over? I don't know because, you know,

I don't want to, but I don't see that happening in the next five years at least. As far as the, you know, the phone being the center of all of our devices. I mean, you know, John Turner said it in his opening statement, right, that they see the iPhone and the smartphone, I guess, by extension as the, you know, what is it? The personal intelligent hub or, right? So they see the iPhone as the center of your intelligence ecosystem. So I think I am more of that. again, I don't mean to sound, you know, pro-apple or anything, but I think just smartphone, it's very hard for us to, you know, just move to the, I guess, the Avengers or Iron, you know what I mean?

Yeah, exactly. Yeah, I think we're far from that, but you never know. You know, technology surprises us. Yeah, I'm not very bullish on that. I think we're just going to be using our phones. The phone is the perfect device. You can do literally everything in the world with it. Maybe they'll add some accessories to it that are AI-oriented, but like we're not getting rid of our phones.

but I don't know we'll see like you said anything could happen in five 10 years Nabila I really appreciate your time it was awesome talking smartphone and Apple and everything and we'll have to have you back on when the next one comes out absolutely pleasure to be here good chat thank you so much well all right guys hope you enjoyed that conversation with nabila pop pal you know I always love talking to people who are experts in an industry and track it closely I was honestly surprised to hear Nabila say that they think the iPhone 18 pro will sell well and I'm really curious to see how the duo does I do think think that phone will be a big hit, especially in China.

Let me know what you guys thought about today's conversation. Did it make you more bullish on Apple going forward? Also, are you planning to upgrade your phone this year, or are you holding onto your phone a little longer? Got your thoughts on Spotify and YouTube. And while you're at it, consider giving us a five-star rating as well. You know, all that engagement really does help us out, and it helps other people find the show.

Thank you guys so much for listening, watching, and commenting. Shout out to Mike for all the work behind the scenes. And we'll see you guys back here tomorrow.