Tim Cook Says Apple Price Increases Are 'Unavoidable' Due to Memory Costs

[MacRumors]

Apple is raising its prices to offset the high cost of memory and storage, CEO Tim Cook told The Wall Street Journal. Apple is no longer able to absorb the increased prices and will need to pass some of the cost on to consumers.

"Unfortunately, price increases are unavoidable," said Cook. "We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers from the increases, but the situation has become unsustainable."

Cook did not say which products will get price increases or how much pricing will go up. The iPhone 18 Pro and iPhone 18 Pro Max coming in September could be more expensive than the iPhone 17 Pro and iPhone 17 Pro Max. Prices on iPads and Macs could go up in the near future.

Apple already raised the price of the Mac mini from $599 to $799 by eliminating its lowest-tier model. Apple has also eliminated several higher-tier Mac mini and Mac Studio options.

Growing demand for memory and storage chips from AI companies has led to chip shortages and higher costs. The Wall Street Journal suggests Apple will need to increase device costs "substantially" to maintain its current profit margins given the cost of memory chips and SSDs. Research firm TechInsights claims Apple will need to make the iPhone 18 Pro around $270 more expensive to keep its existing profit margin.

Apple is struggling more with memory chips, but storage chips are also an issue. "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," Cook told The Wall Street Journal. Cook said Apple will use its cash to increase memory supply, but he did not give details on what that means.

Apple does not plan to create its own memory and storage factories. "We can't do everything," Cook said. "We know what we're good at."

While memory chip makers like Samsung, SK Hynix, and Micron are increasing production capacity, much of that added capacity will prioritize server chips. Demand for consumer-device chips is expected to continue to outpace supply. At the same time, Apple needs to increase the DRAM in its devices to support new AI features. Cook likened the memory shortages to a hundred-year flood. "I've never seen anything like it in any area in over 40 years," he said.

Apple is one of the largest purchasers of memory and storage worldwide, but it is likely reluctant to make the same deals AI companies do. Those deals involve signing multi-year agreements with a large cash prepayment.

Multiple companies have already raised their prices, including Samsung, Microsoft, Sony, and Dell.


Article Link: Tim Cook Says Apple Price Increases Are 'Unavoidable' Due to Memory Costs

 

[KPOM]

Not surprising. I’ve been telling people if they want a Mac with a higher memory capacity to buy now before prices go up.

My guess is that Tim Cook is doing this as cover for John Ternus so that he doesn’t look like the “bad guy” at his first major product announcement as CEO raising prices. Cook described the increase in demand for RAM as a “100-year flood.”

 

[TVreporter]

Multi-Trillion dollar company says that's not enough! News at 11!

 

[Elboe]

This is lame.

 

[sublunar]

Only question now is when. If on product refresh people have time to react, but if it’s a random Tuesday any time that’s going to catch people out.

 

[d686546s]

I'm quite happy I upgraded to a 17 Pro rather than waiting. Price increases were inevitable.

 

[Apple Knowledge Navigator]

As long as they’re honest enough to bring the prices back down when memory becomes sustainable, then I’m happy.

 

[terminator-jq]

Now the real question is once all these memory shortages get sorted out or they find some new solution to fix it, will these companies ever drop their prices back down…? I think we all know the answer to that one.

 

[uacd]

Well, pass the cost then. People come and go… to Android. It has never been easier than now to find simple, cheap and functional smartphone that works just like any iPhone.

Tim forgot that the market is oversaturated these days with boring slates. And customer loyalty/ecosystem is no longer that relevant

 

[Apple$]

Popcorn waiting…..

 

[Spock]

Now the real question is once all these memory shortages get sorted out or they find some new solution to fix it, will these companies ever drop their prices back down…? I think we all know the answer to that one.

Apple has lowered prices in the past with new models.

 

[JPack]

Nobody should be surprised by this. Earlier this year, some people actually believed the myth Apple buys memory years in advance and would be shielded from any price increases. The reality is AI hyperscalers have far deeper pockets than Apple. Nobody is immune to DRAM and NAND shortages.

This situation won't be fixed until 2028 or 2030 when other fabs around the world come online.

 

[CapitalIdea]

Multi-Trillion dollar company says that's not enough! News at 11!

If you feel raw about it, feel free to buy some stranger RAM and give it to them.

 

[963852741]

I'm good for at least few more years. This will be resolved in less time than that.

 

[capamac]

Look, would you really want to miss out on all these cool AI videos just to have cheaper Macs?

 

[youdontsay]

I completely understand that they are absorbing a huge part of the cost and need to pass some of it on to customers. That’s fair.

But I’m also a strong believer in the meaning of words.

“Unsustainable” means that, if they don’t pass it on to customers, the company will lose money. To which I say: suuuuuuuuure.

 

[alphaod]

Apple is a business. Trillion, billion, local mom-and-pop stores, all have the same goal of a business: to make money. To make money they need to raise prices when costs go up. This is normal. The best we can hope for is they don't F us over in other ways making inferior products (same as your local restaurant not reducing portions while raising prices).

As a consumer we can choose to not buy as much when the prices go up. I still use an iPhone 13 and very happy with it. When I need to upgrade I can delay by another year. Complaining about a company trying to make more money is like complaining about water being wet.

 

[odyssey924]

In other words, if you were thinking of buying in the next 6 months, probably now is the time.

 

[KPOM]

Well, pass the cost then. People come and go… to Android. It has never been easier than now to find simple, cheap and functional smartphone that works just like any iPhone.

Tim forgot that the market is oversaturated these days with boring slates. And customer loyalty/ecosystem is no longer that relevant

Except they are facing the same memory constraints. My guess is that Tim Cook is providing cover for John Ternus to avoid making him look like the “bad guy” at his first major product announcement as CEO.

 

[chrono1081]

Not surprising. I’ve been telling people if they want a Mac with a higher memory capacity to buy now before prices go up.

I’ve been trying to tell my work this and they ignore me saying there’s “not room in the budget” while they spend millions a month on AI credits.

 

[Darmok N Jalad]

What these big companies often fail to mention is why memory and storage prices are so bad that they need to raise prices. That’s because they are the ones dumping massive piles of cash into all things AI, so they are effectively the ones creating the scarcities.

 

[dannyyankou]

I think they’ll do something similar to a couple years ago and increase the base iPhone 18 pro to 512gb and keep the price of that configuration the same. And maybe add a 2TB option.

 

[Falco McGregor]

Cook is really taking one for John Ternus here, pre-announcing price hikes so the new CEO doesn’t have that be the biggest takeaway from his first launch event in September.

 

[tomtad]

The answer seems to be less RAM and more efficient computers. Which Apple is well placed to take advantage of.

 

[lepetitnicolas]

Lepetitnicolas says people's money decrease is "unavoidable" due to cost of iDevices.