Apple continues work to get White House go-ahead to source memory from Chinese supplier CXMT, which the US government has placed restrictions on.

For Apple, the issue comes down to simple math. With the cost of making iPhones up 38% because of eye-watering memory price increases — up almost 7-fold since the beginning of 2025 — it makes sense to make pragmatic choices when it comes to sourcing supply, particularly when other computer companies (including HP and Acer) already obtain memory from CXMT.

US resistance to the plan is that because of the way Apple packages memory on chip, the use of that memory might partly contravene the technology transfer restrictions the US has in place. Note: use of off-the-shelf components is fine.

Apple has been lobbying to use memory from the supplier only on devices made and sold in China and would likely argue this is reasonable given that both HP and Acer already use CXMT memory in products sold outside the US. 

Why it’s really about supply

The iPhone maker’s dilemma isn’t just about memory price, it’s also about ensuring it has enough component supply to satisfy demand for its products. This is plausibly a bigger challenge for the company, which is already warning of constrained supply because of lack of available memory. Samsung, Micron, and SK Hynix have allegedly already sold through all their DRAM production for 2027, which only sharpens Apple’s case to secure alternate sources.

With that in mind, it matters that China consumes around 20% of all Apple hardware sold globally. All the company needs is the go-ahead to use RAM from CXMT in those Chinese-made, China-sold devices.

That alone would effectively grow its usable memory supply by the same amount, because the non-restricted memory it currently has to use in Chinese-market products could be freed up for devices sold elsewhere, with CXMT covering the China-sold units instead.

With demand for its products accelerating —even amid a broad industry downturn — Apple really wants to make sure it has enough of the component to meet demand. Those powerful, on-premises 1.5TB RAM-equipped M7 Ultra Mac Studio AI clusters won’t exist unless it’s possible to find memory to put inside them.

The timeline challenge

The proposed arrangement with CXMT might not be a quick fix. Recent reporting indicated the company has already reached its production capacity for 2026, though it is working to double capacity by 2028. Apple has already tested memory chips from the company across products including iPhones and MacBooks.

While Apple this year has applied steep price increases across all its products (except for iPhones), it is now expected to increase the cost of the current iPhone 17 models perhaps as soon as this week. 

Market reports already warn that Apple will raise prices on its soon-to-debut iPhone 18 Pro and iPhone Ultra devices next month, and we expect availability to be constrained, once again as a result of RAM shortages. Even if Apple gets the go-ahead to work with CXMT to close the gap, the positive impact of that arrangement is unlikely to kick in before next year.

Enjoy the pain

Elsewhere, big memory manufacturers, including SK Hynix, have announced plans to invest in new DRAM manufacturing capacity. But this will not be operational until 2029, at the earliest.

This suggests constrained product availability and higher prices for the coming months — and the only way Apple, or anyone else, will be able to limit the impact of those price increases across the entire electronics industry will be if they can obtain additional stocks of memory from vendors outside the big three. If they cannot, you can kiss the age of abundance goodbye.

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Chinese smartphone makers have been followers in the global market, embracing the concepts and paradigms set in the past 20 years by Apple and Google. But AI may be giving the Chinese an opportunity to break away and set their own path forward. 

Specifically, Chinese companies are integrating AI more fully into smartphones, and also using AI for limited robotics in phones. Here’s what you need to know about these emerging trends. 

China’s ZTE recently showed its Nubia NaviX Ultra. The phone runs ByteDance’s Doubao AI agent, which users can access with voice commands or by pressing a button on the phone. The phone has no home screen and no conventional app store.

Another Chinese company, called StepFun — it was founded in 2023 by Jiang Daxin, a former Microsoft vice president and chief scientist at Microsoft’s Software Technology Center Asia — sells a phone called the StepX Neo. It runs a proprietary operating system called Step AOS based on Android, Linux, and an RTOS containing a built-in AI agent called Step Amoo. The StepX Neo splits phone functions into four primitives (communication, apps, files, system tools) that the agent recombines based on the stated goals of the user. 

Honor, a phone maker spun off from Huawei, has an AI agent the company built with input from Alibaba called the YOYO Intelligent Agent. It ships on Honor’s entire MagicOS 10-eligible lineup.

Note: an American company is enabling this. All three phones use Anthropic’s Model Context Protocol (MCP) to give system-level access to the agents. 

None of these phones will become available in the United States. ZTE is banned from the US by the FCC over national-security concerns, while the StepFun and Honor phones are built for the Chinese market with no US version planned. 

All modern smartphones can run AI. By simply visiting the Apple App Store or the Google Play Store, anyone can download dozens of AI apps, including those offered by the frontier model companies. Or they can use the AI services and tools built in to phones by Apple and Google. 

How agentic AI phones are different

What’s different about the new agentic AI phones in China is that the operating system itself has an agentic AI layer that enables it to function across apps and instead of apps. 

While agentic AI phones represent a minority of the current market, they feel like the future. And that future is consequential. First, it’s a another step toward independence from Android. Google’s services layer is already gone from China. Now the Android app layer is being replaced by vertically integrated agent stacks owned by Chinese super-app companies. 

Despite building agentic features that cross app boundaries to a limited degree, Apple and Google are unlikely to allow third-party agents to replace the app layer of their mobile OSs anytime soon. 

Apple takes 15% to 30% of app revenue. And (according to an estimate introduced during the Epic v. Apple/Google litigation but not confirmed by Google), the Play Store has historically accounted for somewhere between 17% and 26% of Google’s operating income. The entire economic logic of iOS and Android depends on apps. An agentic layer that dissolves those apps into tasks isn’t something either company wants to think about. The Chinese OEMs can blow up the app model because they had no stake in it. 

Meanwhile, the AI trend is suffocating mobile app in-app purchases, which dropped by roughly 40% by early 2026, even as people pay more for those purchases compared to a few years ago (because they’re dominated by subscriptions to AI and vibe-coded apps). In other words, even inside the app stores, there’s a shift from the old app model to AI replacements. 

AI is not only changing the software model, but the hardware model, too. 

Robot phones

Another categorical way China is splitting off from the global smartphone concept is the nascent market of robot phones. A robot phone is one that uses AI to control physical robotic components on an actual phone. 

The leading contender in this field is a device called the Honor Robot Phone, which I wrote  about in March. A leaked unboxing video of the Honor Robot Phone appeared this week on the Chinese social network Weibo.

The robotic element is a gimbal with a 200-megapixel camera on it. One basic use is that the phone can remain stationary while propped up on a table or clamped to a tripod, while the camera tracks a moving subject using AI. Another use is to walk while using it and let the gimbal smooth out the jiggling and movement. Software on the phone also enables automated cinematic special effects. 

But the real leap forward is in “self expression” for the phone. The Honor Robot Phone exhibits subtle Attachment Economy features. It shakes its “head” no and nods yes. And it can do a “backflip” to “cheer you up.” The phone gets a personality. 

Honor plans to launch the phone on Aug. 12 in China. 

So-called “robot phones” are even more rare in China than agentic AI phones. Still, the Honor Robot Phone represents another Chinese departure from the Silicon Valley smartphone hardware model of a static pane of glass. The Honor Robot Phone has a body. It feels like the future, too, as it’s one of the rare products in the emerging Attachment Economy, where humanlike attributes (in this case, gestures and body language) are deployed to make the consumer more “attached” to devices that seem like they have thoughts and feelings. 

The AI future of phones

As the Chinese smartphone market splits off from the American one, it presents an alternative for the world. Because if the agentic AI phones succeed in China, they’ll almost certainly be offered internationally. 

That represents not only hardware sales, but the penetration of Chinese super-apps, Chinese financial services, Chinese AI-based information (and along with it, the Chinese government’s world view, we can expect). 

The only question is: Will the world prefer the Chinese agentic AI approach or the US AI app model? 

Adding to the complexity is the coming wave of AI wearables, most of which will likely be wirelessly “tethered” to smartphones that provide intelligence and connectivity. Soon, we’ll be conversing with our glasses and watches. Our glasses and watches will be “conversing” with our phones. And our phones will be conversing with AI models that represent the values, beliefs and biases of their creators. 

The Chinese agentic AI movement represents a split in how phones work and how the people worldwide interact with information, technology and each other. 

AI disclosures: This article is 100% human-written by the author, Mike Elgan. Some research, ideation, and fact- and grammar-checking was performed using AI tools.