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
