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

[frownface]

bom cost of the ram in the 17 pro is estimated at $39, even if it goes up +50%, that's an extra $20.
Apple "can no longer afford to absorb that increase" but will happily charge you an extra $50 for something that's cost them an extra $20.

 

[awshucks]

bom cost of the ram in the 17 pro is estimated at $39, even if it goes up +50%, that's an extra $20.
Apple "can no longer afford to absorb that increase" but will happily charge you an extra $50 for something that's cost them an extra $20.

It's also the NAND chips that are affected. And RAM and NAND have not gone up 50%. More like 400%+

 

[josephliu2003]

Why don’t they use some of their BILLIONS in assets to offset the cost?

 

[capamac]

I’m still quite content with 8GB RAM on my 2020 Air. I use Xcode regularly, Safari, terminal, FCP and iMovie occasionally, Minecraft and X-Plane 12 every so often. Of all those apps only X-plane bumps up against the 8GB ceiling.

 

[villagehiker]

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

Yep. I recently replaced a 2016 MacBook Pro with a MacBook Neo. Less RAM. Less everything. Except performance. MacBook Neo blows the doors off 2016 MacBook Pro for pretty much everything, with half the RAM. Good job Apple.

We do well to limit data center AI use. I have been using it extensively for research for three or more years. The quality of content is getting worse, not better. Anthropic is still the best at coding Plain TeX (tug.org) macros. None of them can discern truth from untruth. Backing off from my addiction. Starting to use AI running on a MacBook Neo for proofreading and spellchecking. Doing less research using AI. Still doing some Plain TeX macro work with Anthropic.

 

[Populus]

I suggest you try installing Sequoia (via OCLP) on an external SSD. If the performance is adequate booting from the external SSD, you can keep OS 12 installed on your Mini's internal drive. "Mr Macintosh" posted an excellent YouTube video with step-by-step instructions on installing OCLP/Sequoia onto an external SSD. I did this on my 2017 iMac and I've been very satisfied with the performance. It might work equally well on your 2014 Mini. IMHO, it's worth trying before you commit to a more major transition to a Linux OS.

Nah, I know that method but it involves disabling the most nuclear security measure of the Mac, the SIP, and providing my Apple Account credentials to this software.

I already had an argument when I asked a few years ago if it was “safe” and a user there started to “white knight” the developers saying that nothing is 100% safe and not replying to my questions. Basically, a “trust me bro” but with a passive aggressive attitude. So I left the thread convinced that I would never use that patching tool. If I had any doubt, that user dissipated any doubts on me, and I decided to walk away. And to be honest, aside from the lack of security patches, it runs flawlessly on Monterey.

Thanks for the suggestion, anyway.

 

[Populus]

Yep. I recently replaced at 2016 MacBook Pro with a MacBook Neo. Less RAM. Less everything. Except performance. MacBook Neo blows the doors office off MacBook Pro for pretty much everything, with half the RAM. Good job Apple.

We would do well to stop using data center AI. I have been using it extensively for research for three or more years. The quality of content is getting worse, not better. Anthropic is still the best at coding Plain TeX (tug.org) macros. None of them can discern truth from untruth. Backing off from my addiction. Starting to use AI running on MacBook Neo.

But as far as I know, there are few local LLMs that run comfortably on an 8GB machine, right? What models are you using and what tasks are you doing locally?

To be fair, I agree that we should stop using this cloud AI services. Maybe if they were developed for computers before running in servers, the race would have been different. But this frontier models came first and the local scene is trying to catch up to the models we had three years ago…

My next Mac will ideally have 32GB of RAM (I know, I’ll have to be fast and order it before it’s too late), but still, users from the local LLM scene say that I would need more than double that amount to run decent models… not for coding, mind you. Coding is not what I’d use the LLMs for (I’m clarifying this because when we talk about local LLMs most people can only think about coding)

 

[DBRK95B]

Nah, I know that method but it involves disabling the most nuclear security measure of the Mac, the SIP, and providing my Apple Account credentials to this software.

I already had an argument when I asked a few years ago if it was “safe” and a user there started to “white knight” the developers saying that nothing is 100% safe and not replying to my questions. Basically, a “trust me bro” but with a passive aggressive attitude. So I left the thread convinced that I would never use that patching tool. If I had any doubt, that user dissipated any doubts on me, and I decided to walk away. And to be honest, aside from the lack of security patches, it runs flawlessly on Monterey.

Thanks for the suggestion, anyway.

Thanks for enlightening me. I didn't realize that installing OCLP involved disabling SIP, thereby reducing system security. I had assumed that running on an outdated MacOS that no longer receives security updates would be worse.

Perhaps this is a stupid question, but does running a Mac on Linux reduce security in any ways? I clearly know much less about this stuff than many contributors to this forum.

 

[villagehiker]

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.

Maybe so. If so, well done, Tim.

 

[Hammerd]

Prices will rise to what the market will accept and the market can bear.

Realistically, Macs are cheaper now than they were in the last four years of the Mac Intel era, adjusted for inflation, but you now get far more for your money.

For a year or so Mac’s have been the more affordable option at the lower end of the market.

iPhones haven’t had a price hike, but storage a memory has increased.

A price hike is inevitable. Not just from Apple, but across the industry.

What I hope is that Apple deliberately make the price increase less than expected and less than being routed by leakers and pundits, and I. That way they can save some face. If their price increase is less than the average price increase across the industry, they’ll look pretty good ( but not on MR, because people do like to complain on forums).

But, even with a price hike, potential customers will not stop but o g. And if they do keep buying, that itself vindicates the price hike. Because, getting back to where I started, prices rise to the limit the market will accept.

What tells you that buyers across the globe can bear a massive price increase of the already most expensive mass-market products and especially iPhone whose sales account for the majority of Apple’s revenues?

 

[villagehiker]

But as far as I know, there are few local LLMs that run comfortably on an 8GB machine, right? What models are you using and what tasks are you doing locally?

To be fair, I agree that we should stop using this cloud AI services. Maybe if they were developed for computers before running in servers, the race would have been different. But this frontier models came first and the local scene is trying to catch up to the models we had three years ago…

My next Mac will ideally have 32GB of RAM (I know, I’ll have to be fast and order it before it’s too late), but still, users from the local LLM scene say that I would need more than double that amount to run decent models… not for coding, mind you. Coding is not what I’d use the LLMs for (I’m clarifying this because when we talk about local LLMs most people can only think about coding)

I am using MacBook Neo just for proofing and spellchecking with Apple AI. Apple says these run locally. I write using the TeXShop text editor and Plain TeX (tug.org/mactex) for PDFs. No word processor. I was going to purchase a MacBook Pro for $2500 or more, but switched at the last minute to a $699 Neo. Not disappointed to date—three months with Neo.

 

[villagehiker]

What tells you that buyers across the globe can bear a massive price increase of the already most expensive mass-market products and especially iPhone whose sales account for the majority of Apple’s revenues?

Macs almost always have a much lower total cost of ownership than Windows machines.

Initial costs of Macs can be higher, but not really that much when comparing performance. Macs provide very long usefulness lives. My family runs a 2008 Aluminum MacBook, at 2011 iMac, a 2016 MacBook Pro, a 2024 MacBook Air, a current MacBook Neo. I use the 2008 and 2016 MacBooks, plus the Neo. In addition, the software is stable, needing very little maintenance. Apple provides excellent support in their stores and online. You buy a Mac and use it without headaches for five-six-seven-eight years.

Windows machines always cause heartaches and pains and add-on expenses and wasted time, lots of wasted time. All of these drive up the total cost of ownership.

We use iPhones for five years. Samsung does great hardware, but Android—besides being stolen from Apple by a previous Google CEO—is clunky.

The problem with Android is just my biased opinion. The industrial espionage and theft from Apple is historical fact. The Mac vs Windows total cost of ownership is pretty easy to verify.

 

[FatLouie]

Why don’t they use some of their BILLIONS in assets to offset the cost?

I mentioned that earlier, and another member mocked me. Apparently, if Apple applies any of the ~68 billion in cash they have, that reduced profit will prevent investors from flocking to Apples front door and helping Apple to grow.

I had no idea Apple had trouble getting investors. LMAO!

Regardless, Apple is driven to make even more profit in the darkest of times.

 

[Abazigal]

What tells you that buyers across the globe can bear a massive price increase of the already most expensive mass-market products and especially iPhone whose sales account for the majority of Apple’s revenues?

My take is that people who own Apple products tend to have more disposable income, and are therefore in a better position to take on any price increase as compared to simply switching to a competing alternative (which will likely also be seeing price hikes of their own).

It all goes back to Apple having aggregated the best customers in the world. It shows in the iOS App Store bringing in more revenue than the Google Play Store, it shows in the iPhone regularly commanding the lion's share of profits in the market, it shows in Google willing to pay Apple $20 billion each year to keep search as default (implying how valuable iOS users are), it shows in iPhone users being willing to pay a premium for Apple Watches and AirPods, and it's also what makes the iPhone relatively price-inelastic (in my opinion).

Even if they choose not to upgrade, they will likely still choose to hold on to their existing iPhone for another year, and will still be making Apple money in the form of accessories, app revenue, subscriptions, even little things like iCloud storage and Apple Pay.

Either way, Apple wins.

 

[SFjohn]

Only the Max does.

You are correct, that’s the one I ordered.

 

[ThomasJL]

Do you Tim Cook fans finally see how soldered RAM was a bad idea and not worth the tradeoff to the majority of customers? (That's a rhetorical question because Cook fans will never admit Cook did anything wrong.) If Apple were still using industry-standard user-replaceable RAM, customers could have bought the least expensive base model with the least amount of RAM, and then bought third-party RAM for much lower prices than what Apple charges for the same amount of RAM.

 

[maxoakland]

They literally do. As a corporation on their ROE / ROIC and the investor class on their capital.

What is your measure of success, and why is it more correct than the measure of success used by tens of millions of direct individual shareholders (growth, revenue, cash flow, net income, etc)?

I'm an individual shareholder and I think that Apple's innovation is stagnant as do many other people. And their opinion matters even if they aren't shareholders

I think you're trying to justify Apple's absurdly high margins but R&D spending isn't going to justify it with the lack of innovation they've been displaying. You can only name one successful new product in the past ten years and it's not even really a product, it's a chip that powers products

That's bad. That's not innovative.

Why are investors, manufacturers, hyperscalers, and other businesses spending money on stuff nobody actually wants?

You have far too much misplaced faith in a group of people we've seen repeatedly fall for technologies nobody wants like NFTs and Crypto because they are desperate not to be left behind. That's your answer. Did people want crypto and NFTs? Did those categories succeed in the market? Nope. Did investors go all-in on them. Yup! Investors are not the barometer of what will be successful. They're gamblers, nothing more

I'd think you would be able to see that but I guess you don't. Maybe those blinders are also the reason you're blind to Apple's decline in innovation and non-justifiably high margins. You seem to have a blind faith in the system we live under right now and you're probably not going to see things unravelling until after they've already unraveled

 

[maxoakland]

Yep. I recently replaced a 2016 MacBook Pro with a MacBook Neo. Less RAM. Less everything. Except performance. MacBook Neo blows the doors off 2016 MacBook Pro for pretty much everything, with half the RAM. Good job Apple.

I should hope so. That MacBook Pro is ten years old

We do well to limit data center AI use. I have been using it extensively for research for three or more years. The quality of content is getting worse, not better. Anthropic is still the best at coding Plain TeX (tug.org) macros. None of them can discern truth from untruth. Backing off from my addiction. Starting to use AI running on a MacBook Neo for proofreading and spellchecking. Doing less research using AI. Still doing some Plain TeX macro work with Anthropic.

Yes, I've found that it's gotten worse as well. I think they're cutting corners because they still can't find any reason for people to pay what it costs

 

[Amazing Iceman]

Agree. From my little understanding (and a little research), the issue is that memory manufacturing companies produce a certain amount of memory for the corporate (producer-services) and a certain amount for the consumer markets. Each are allocated by their projections of demand/need, sales vs. their resources and manufacturing capacities.

In the beginning for each year (but projected even probably a few years before). Memory manufacturing companies have already allocated their supplies to the consumer markets, but in Apple's case as other big companies who have contractual options in place, have already negotiated/contracted their supplies and needs years ago and/or a few years ago for an agreed purchasing price/per unit - this is why Apple already had a set price for their memory and did not need to raise prices earlier until now or soon.

What has happened is that the A.I. companies have bought out and used up their supplies too fast to meet the growing demand in the game to be the dominate or "it" for the A.I. boom. Any excess or surplus of memory chips etc. goes to that client(s) because the consumer markets are secondary on their priority list. The very same memory I bought last year has doubled or tripled in costs on Amazon... Supplier priorities are NOT the consumer markets. We get the "crumbs or what is the left-overs basically.."

So it is really not Apple or other type companies fault that sell in the consumer markets (but I wouldn't give Apple any pass for their decisions to raise prices (regardless) because they should have found a way to eat the costs without lowering standards as other industries do..Apple's memory costs were already high (including profit) before this shortage). Tim is a master at this, so if he actually says they are hurting, it is quite possibly and probably may be the case that they are...but ONLY in the sense that any changes or cuts to Apple would only hurt his profit margin, and he won't do it, maybe for the short term, but not toward Fall or 4th quarter. So instead, Tim nicely said we have to raise prices, but REALLY he is saying to us: "Tough..you have to take the hit, we won't.." Besides (as someone else said before on this tread), it would not look good for the next C.E.O. to raise prices as the first decision out the shoot or first at the helm.

So, as usual..we the consumer (peasant) take the hit...will have to try to convince my wife when I have to pay even more for my next Mac Studio...Don't look forward to THAT conversation...🤣

Thank you for the helpful insight...

And good thing we only have one wife to convince, and not 2 or 4...
That could most likely mean a plural "NO".
Or...they may say "YES" to compete against each other for our approval.
Regardless, one wife is enough... heheh!

 

[Abazigal]

Do you Tim Cook fans finally see how soldered RAM was a bad idea and not worth the tradeoff to the majority of customers? (That's a rhetorical question because Cook fans will never admit Cook did anything wrong.) If Apple were still using industry-standard user-replaceable RAM, customers could have bought the least expensive base model with the least amount of RAM, and then bought third-party RAM for much lower prices than what Apple charges for the same amount of RAM.

Apple silicon + soldered ram > intel processors + expandable ram for me.

 

[johnmcboston]

Gotta pay those stockholders

 

[thettareddast]

I'm an individual shareholder and I think that Apple's innovation is stagnant as do many other people. And their opinion matters even if they aren't shareholders

...

I'd think you would be able to see that but I guess you don't. Maybe those blinders are also the reason you're blind to Apple's decline in innovation and non-justifiably high margins. You seem to have a blind faith in the system we live under right now and you're probably not going to see things unravelling until after they've already unraveled

Muh innovation! You're blind to your own conviction since you remain a shareholder. The decline fright is something scaremongers have cried for 15 years since they nailed Steve Jobs coffin shut while the company continued breaching all time high in all metrics.

BTW, can you share what sort of investments Apple put into crypto/nft, as well as the rest of the S&P500 constituents, and maybe quantify its adoption vs AI?

Money talk, BS walks.

 

[thettareddast]

Yes the supply chain issues were real during the pandemic. Never implied otherwise. What I was trying to get at is the malignant greed of companies to raise prices for any reason only to never have them come back down again ever.

Have you ever, at any time in your life, volunteered to pay more money than what Apple asked, for any reason... and then never electing to pay the asking price again ever?

Is it malignant greed on your end?

You live in a free world operating in a free market transacting commodity goods. How is it that their exerting their price power (as high as acceptable by buyer) is greedy and bad but your exerting your price power (as low as acceptable by sellers) is okay and moral. How the symmetry such a difficult concept for people.

 

[LFO8]

That's literally what corporations do. They milk. That's their purpose.

Rather than blaming corporations, I'd direct my ire towards government and public representatives.

After all, corporations exist to benefit the interests of their shareholders, governments exist to benefit the electorate / general public. It's why they are called "public servants" and "representatives". Their mandate is to work for the public.

Governments, for decades already are under the same spell; 'The Economy' is God and number must always go up, or, in the very worst cast, stay the same.

 

[LFO8]

Have you ever, at any time in your life, volunteered to pay more money than what Apple asked, for any reason... and then never electing to pay the asking price again ever?

Is it malignant greed on your end?

You live in a free world operating in a free market transacting commodity goods. How is it that their exerting their price power (as high as acceptable by buyer) is greedy and bad but your exerting your price power (as low as acceptable by sellers) is okay and moral. How the symmetry such a difficult concept for people.

I am not singling out Apple, but the principle that the entire economy is based on. When all operate under; 'Increased cost of doing business get's passed down to the customer' what 'choice' do we 'consumers' (what a dreadful categorization) have when it comes to our basic life needs like water, food, power? We have to eat don't we. We can't decide their to just not spend money on that anymore. And When it comes to food one can decide to go for dirt cheap ultra processed stuff instead of healthy (actual) nutrition but pay dearly with the price of your health (not really a choice in my opinion).

And putting the choices of trillion dollar entities and governments agains the 'freedom' and 'power' of an individual is some kind of strange and distorted equivalence ..?