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

[Happy_John]

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?

Well, firstly, because sites like this are still busy and interested in any new rumours about new devices. And in the wider world, there is absolutely no indication that people are turning their backs on Apple products.

Secondly, by far the biggest selling product lines by Apple are iPhones, and at the pain of price increase will be "softened" when buying an iPhone through a 24 month carrier deal - a $100 price increase stings when presented as such, but will not appear as a significant increase in the monthly charge of monthly iPhone installment + carrier fee.

Thirdly - what's air the alternatives? A) Don't buy, stick with what you have. Many people already do this, but the FOMO of "new shiny thing" will be a stronger pull for those who upgrade often and regularly than the negative pull of a price in crease. B) Switch to a Windows or Linux machine or android phone / tablet - this might happen, but only for a very small amount of the Apple suer base - brand loyalty and the draw of the ecosystem are very strong with Apple users
c) Suck it up and pay, or suck it up at not not max out specs to the level you would have done. Option C is most likely.

Lastly, iPhones and MAcBook pros are expensive items, and with a price increase will be more expensive, but relative to other 'expensive" luxury-but-necessity purchases - a home, a new car, and iPhone is relatively affordable. That's not to justify the prices, but to say that iPhones are treated as a necessity, a higher end iPhone is a luxury version of a necessity, and in the current economy, money is too tight for many people to buy a home or buy a luxury car, or even take an expensive overseas holiday, so an expensive Apple item, like a high end iPone, becomes the expensive premium luxury item that is affordable - in other words, if people can't afford to buy the really expensive items, they will make themselves feel better by buying expensive luxury items they can afford - and iPhones (and tech in general) very conveniently fit that space. That is deliberate part of Apple's marketing strategy.

In the end, a price increase is not going to get the Apple user base to boycott Apple en masse. So yes, the market will bear an Apple price increase.

 

[Dirk Pieters]

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.

That’s what businesses do.

Hate the game, not the player.

 

[Dirk Pieters]

Love apple but they are the greediest of the greedy...take your Irish 137 $$$$$billion and pay your taxes and act like a responsible tax paying AMERICAN COMPANY DAMNIT

Your hate should go towards Ireland for creating a tax haven.

Of course any business is going to use existing loopholes holes to pay less taxes.

I’ll assume that you yourself want to pay less taxes as well.

 

[Populus]

FWIW looks like Asahi Linux is making significant progress on M3 support

Good, but I guess it will still take them a while to reach the M5 gen…

 

[thettareddast]

I am 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 ..?

The strange equivalence is bringing water, food, and power into a discussion about consumer electronic goods.

(Nevermind that water is a municipal service, food is hypercompetitive with almost no margins for sellers, and power is heavily regulated).

The principle that the economy is based on is the freedom of sellers and buyers. I have a choice not to buy an iPhone 17 or a Samsung S5billion and I exercise that choice every single day.

Apple owes you zero obligation to justify their choice to ask a certain price, in the same way I owe zero explanation to Apple why I won't buy a Vision Pro until it drops down to $300.

If I reasoned, "my rent is getting more expensive, so I need to pass down my tightened budget of expenditures to the seller". Would you feel unfair for Apple if I pose my personal spending restriction onto them? If you're listing something on Craigslist and people give you the same sob story, are you compelled to suddenly drop your price? Are they being unfair to you?

 

[hovscorpion12]

Welp. I just put my order for a 16 M5 Max.

4-5 week wait is going to be brutal.

 

[LFO8]

The strange equivalence is bringing water, food, and power into a discussion about consumer electronic goods.

(Nevermind that water is a municipal service, food is hypercompetitive with almost no margins for sellers, and power is heavily regulated).

The principle that the economy is based on is the freedom of sellers and buyers. I have a choice not to buy an iPhone 17 or a Samsung S5billion and I exercise that choice every single day.

Apple owes you zero obligation to justify their choice to ask a certain price, in the same way I owe zero explanation to Apple why I won't buy a Vision Pro until it drops down to $300.

If I reasoned, "my rent is getting more expensive, so I need to pass down my tightened budget of expenditures to the seller". Would you feel unfair for Apple if I pose my personal spending restriction onto them? If you're listing something on Craigslist and people give you the same sob story, are you compelled to suddenly drop your price? Are they being unfair to you?

What an odd example... posting something on Craigslist as a private entity to sell on to a 3rd party because you are no longer using said item. Not to base a business on.. right?

You appear to me to be placing individuals on the same footing as international mega corporations or governments.. Obviously practice has shown that the same rules do not apply. And I brought food et al into it as I was speaking to the economy as a whole and the consequences for us of how big corps and governments treat that creation.

You keep bringing it back to Apple alone, but I am simply pointing out that they are just another (amongst many.. and some we do depend on for our basic living needs) that are doing the dance at our expense and throw up whatever justification for raising prices yet again. "Uh, we are soooo sorry to do this mr ... but we are gonna HAVE to raise prices to correct for inflation"

How many emails and letters like that over the past years? But eh.. you can choose to go without internet.. right? Media? Your phone service? Food? Where you live? You are free after all.

If you think power is 'heavily regulated' ... yeah by the power companies apparently.. and housing.. don't get me started most 'social' housing already owned by investment companies for whom.. you guessed it: "Number must go up".

 

[seek3r]

Good, but I guess it will still take them a while to reach the M5 gen…

From what I’ve read (and kernel dev and this kind of hardware reverse engineering in general is not my end of things, so I welcome anyone correcting me) there was a lot of major changes in M2–>M3 that persist after that through M5, and it seems like the future jumps to M4 and M5 will be easier than the one from M2 to M3. Crossing my fingers that’s true.

 

[subjonas]

They also shouldn’t expect to have insanely high margins at all times

Forgot to ask, what's considered insanely high? I believe their profit is usually around mid to high 20s percent overall, according to the earnings calls.

 

[DerekK]

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.

Prices for LPDDR have gone up about 95% in the last 3 months, after increasing about 60% in the prior 3 months. Current estimates are between $8/GB and $20/GB. Assuming Apple gets a good deal of about $10/GB, the 12 GB for the 17 Pro would now cost about $120.

When the price went up $20, Apple was absorbing it. Now that it has gone up $80, it's not easy for them to do that.

And yes, Apple tends to charge roughly double the cost of the parts. This pays for the marketing, assembly, shipping, warranties, and it's also where their profit comes from.

 

[FatLouie]

That’s what businesses do.

Hate the game, not the player.

I hate neither... but Apple could accept lower profit for 12 to 18 months and not skip a beat. Even after absorbing the full increase in memory costs, the iPhone will still make them money... just not as much.

Other than a monitor, I will not be making any major electronic purchase for the next 18 months due to the increasing cost of memory. My refresh cycle was last year; I am good for some time, but any splurge buying of Apple products or other brands is off my roadmap for now.

 

[seek3r]

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 expected around $145 now (see latest MR post on this)… that’s $106 more, not $20 more. ram prices have exploded, it’s nuts. The NaND for the SSDs is skyrocketing too, though not nearly as much

 

[Rychiar]

No it won’t

of course it will. it should be replaced now if it weren't for all this memory nonsense. Unless they go right into m6 but holding that off til next summer would be painful for professionals

 

[carestudio]

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.”

can Human Being go back to the real thing not AI? use more your brain and less AI so memory would not go that crazy nor the power plane.

 

[Charlie Bonesx]

of course it will. it should be replaced now if it weren't for all this memory nonsense. Unless they go right into m6 but holding that off til next summer would be painful for professionals

there is no "of course" currently

 

[littlemacpinkhoodie]

I'm fine with it. In fact, please last at least another 2 years. Cuz I'm heavily invested in $SNDK and $MU. lolol.

 

[ThomasJL]

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

Because Tim Cook is a miser. Don't expect a lot of fairness to customers from Tightwad Tim.

 

[seek3r]

Because Tim Cook is a miser. Don't expect a lot of fairness to customers from Tightwad Tim.

It is a business, they do need to make money, and bluntly eating the level of cost spike the AI boom is causing with RAM would be extremely difficult even for Apple.

But also worth remembering pretty much every tech company other than Apple has already hiked their prices, Apple’s actually the last big holdout, so it’s weird to be calling Cook the miser

Also, I just want to remind you that Apple released their cheapest laptop ever this year, undercutting any windows laptop on quality and speed at that price point, which is absolutely cheap by any measure. Doesnt really jibe with your characterization either

 

[loby]

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!

You have to start early and now with the pitch...as I am hoping to get the next one later at the end of the year after the update. I have already briefly mentioned about "wow...prices on everything are increasing..." and conversations about upgrading etc.

Got to work it now...but so far it is not working. She said to me: "Didn't you just get a laptop?" I thought you said that is the last one..?" 😂 "How many computers do you need..?" Hard to convince and have her understand that there are production computers and "regular" computers. Sigh...it is what it is..

 

[theorist9]

Yeah, no. That’s not happening, because people will continue to pay the outrageous prices in mass. The problem is here to stay and it’s not going away. Get use to it.

I think the problem will go away. This goes in cycles.

In 2023, after data center expansion cooled, memory and storage makers were over-capacity, causing prices to drop. As a result of that, they didn't increase capacity significantly in 2024 and 2025, so were unprepared to meet the demands resulting from the AI boom.

But now they are scrambling to catch up, bringing new plants online at a high rate.

Thus eventually this will stabilize as more plants come online, but it may take until 2030. It's also possible that the need for wafers will be over-projected, leaving us again with excess capacity, and a drop in prices.

 

[DBR2025]

I am an investor

This is music to my earrrrrsssss



Make me rich, children haahahahhha

PS: at least one fold in every household hazhahahha

Catchy innit

LOOOOOOOOOLLZ. Me too. At what $ will Apple do a stock split?

 

[capamac]

Open AI has a $38 billion loss according to leaked financials.

 

[Big_D]

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.

Doubtful, ram and storage are two of the most expensive components, especially now.

RAM for our server has gone from 2K last year to 15K now!

We upgraded our main servers in October, 2 CPUs, 1TB RAM and 60TB of storage. In February this year, we looked at a second site, 1CPU, 512GB RAM and 40TB storage, they were around 30% more expensive than the servers we bought last year!

 

[Populus]

Open AI has a $38 billion loss according to leaked financials.

If I am not mistaken, they continue to build a mega data center, right? And Musk is building more for Grok. Anthropic needs to build more to keep competitive… and there are dozens of Data centers in the US alone, and dozens more projected. So… I guess we’re at the beginning of the crisis.

I’m tempted to wait until October for the next Mac mini, but I’m quite sure that Apple will have risen the prices by then, so it’s now or never. I’ll get the M5 MacBook Air and hopefully it will last me many years.

 

[seek3r]

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.

You dont need to provide your apple creds to oclp…

And it’s a huge open source project with well audited code, what’s your trust issue?