Vodacom Group CEO Shameel Joosub has warned that smartphone prices will rise sharply amid the RAM supply crisis, supply-chain restrictions and rising fuel prices.

Joosub told TechCentral on Monday that the response of the industry and the government will determine just how heavily consumers are impacted by these inflationary pressures.

“What you’re seeing with the memory shortages is that some of your laptops and other equipment could go up by as much as double – so the memory thing is a proper problem and will become a bigger issue going forward,” said Joosub.

He suggested one way of doing this would be to remove or reduce taxes on smartphones, including higher-end models not included in government’s decision to remove luxury taxes on devices under R2 500.

National treasury on 1 April 2025 removed and valorem duties on smartphones costing R2 500 or less following lobbying by communications minister Solly Malatsi.

Although the move was lauded by the industry, some experts criticised it, saying more needed to be done to address the affordability issue. According to Joosub, as device prices rise, many consumers will be forced to downgrade to lower-end products.

Margins

Another factor that will determine how heavily consumers will be affected by price increases is how much of the inflationary impact large manufacturers such as Apple and Samsung absorb. If they pass on the full cost of component price increases, it could hit consumers hard.

“Something like an iPhone will become more expensive, that is just the reality. Whether they absorb that or pass it onto the consumer is going to be the interesting thing. There are certain price points, and these businesses make good margins, so how much of that will be passed onto the purchaser?” Joosub said.

Read: AI chip boom is pushing up costs for telecoms operators

The cost pressures are not only being felt in consumer devices. RAM is used in the equipment in base stations that connect users to the network and in the infrastructure at the core of the network.

Joosub said Vodacom’s capital spending will not change because of increases in equipment costs. The capex envelope – earmarked at R12-billion for the 2027 financial year – will not change.

RAM shortages are being driven by intense demand from hyperscale cloud operators, which need vast amounts of memory to power AI systems.

With data centres hungry for higher-margin high-bandwidth memory, manufacturers such as SK Hynix and Micron Technology have shifted production lines away from the memory used in phones and laptops. The resulting shortage has caused a surge in pricing, with DRAM prices rising 172% in 2025.

Adding fuel to the fire is the recent – and now protracted – war in the Middle East, which has caused a surge in oil prices, leading to inflationary pressures across the global economy. In South Africa, the price of diesel – the main fuel used to transport goods and services – has risen by R12.76/l since the closure of the Strait of Hormuz on 28 February.