Apple margins on RAM and SSD have been obscene for decades. An lately with soldered to prevent people purchasing them elsewhere 10 times cheaper for the very same manufacturer and specifications. So much that they could not only maintain prices of their products, but even reduce them 50% across all their products and still make huge profits and increase market share worldwide.
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Tim Cook Says Apple Price Increases Are 'Unavoidable' Due to Memory Costs
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This is just a poor excuse for rising prices. If they have an increase in cost of ram by 8$, they will rice the price with 30$ Apple has the most expensive ram of all.
According to industry teardowns Apple have been paying roughly $15-20 for 256 GB NAND because of massive volume discounts.
They get them at rock-bottom wholesales prices.
According to industry teardowns Apple have been paying roughly $15-20 for 256 GB NAND because of massive volume discounts.
They get them at rock-bottom wholesales prices.
mittencuh
macrumors regular
AI is a bubble. These companies are burning through cash and resources like crazy. There's a limit and we will find it one day. It may be in six months, it may be in six years. But it will happen. And I am generally a pretty tech-forward person.
DennisdeWit
macrumors 6502a
Feeling lucky I just bought a refurbished Mac Studio M4 Max. Works perfectly fine and 500 EUR cheaper than the usual price. I already have an iPhone 17 Pro Max. Normally I upgrade every year on the iPhone, and I hope to do so this time, too. If it is really expensive, I can keep this one for a while. The MacBook Pro M3 Max also works still fine, so I can wait it out a bit.
HouseLannister
macrumors 68040
Apple only theoretically raised their price. It’s not like they’re in stock.
GMShadow
macrumors 68030
Market cap is not cash on hand.
John better thank Tim for looking like the bad guy here. That’s very clever by Apple.
contacos
macrumors 604
Don't even want to think about how much the iPhone Fold will cost.
Kind of funny how it's "unavoidable" when they have been charging a fortune for ram upgrades for years for something they probably (used to) get for a few bucks in mass
Kind of funny how it's "unavoidable" when they have been charging a fortune for ram upgrades for years for something they probably (used to) get for a few bucks in mass
ErneX
macrumors regular
I was expecting them to raise their prices months ago. Their competitors have been raising prices way before. If anything it seems they actually tried their best to delay having to do so, by removing certain memory configurations recently and earlier than that keeping the prices as they were.
Only those who have not been following this crisis can be surprised by this.
Only those who have not been following this crisis can be surprised by this.
splifingate
Contributor
*natch*
I'm guessing the cracked-desert availability of Mini/Studios is a hedge to create the demand that will soften the remorse with these (our!) future purchases!
It might pop (some re-evalution of costs and corporate value) but it will be like the Dot com bust. AI isn't going away just like the internet didnt go away. It is never going away and it will only grow.
I have the exact same model waiting on a Studio. Will repurpose the iMac as a second monitor but now I know to save more money for what the price increase wiil be.
HiVolt
macrumors 68020
Why doesn't Apple spend some of those billions and build a chip fab? Always relying on 3rd party.
AI tells me that it costs between 15 to $50 billion. Even on the high end, that's peanuts for a multi trillion dollar company. And they could make stuff for others if they have capacity.
AI tells me that it costs between 15 to $50 billion. Even on the high end, that's peanuts for a multi trillion dollar company. And they could make stuff for others if they have capacity.
It’s almost like the people in charge don’t care about us! 🥴
Or when demand crashes.
People always forget that the chip industry always follows a boom/crash cycle.
AssassuN
macrumors regular
Apple trying to make us forget they already have such high margins on their products and can easily swallow the higher costs.
ErneX
macrumors regular
It’s not. Just think about it, they don’t want to increase prices. Sales will take a hit.
PlayStation did it multiple times already for this same reason and sales have tanked considerably. Microsoft can’t even manufacture Xbox Series consoles now because they were already eating like 200 dollars on each Series X sold. This is a huge mess overall and implying they can just eat the cost is wishful thinking.
The real question is exactly how bad this is going to get. Funny that we have some new machines with only 8gb, that everyone loves. Probably should get used to those.
The BIG cloud, AI machines, while the rest of us go backwards in time.
The BIG cloud, AI machines, while the rest of us go backwards in time.
CWallace
macrumors G5
It is not just the base capital cost. You also need to hire the expertise to run it. And that can easily run into the billions per year. And most of that talent is foreign and the current Administration is generally against immigration (though maybe Apple could get them all those Trump Gold Visas. 😛 ).
And of course you can't build a fab in a day. And I expect the equipment that goes into it has long lead-times. And once you have that fab, it is designed around a certain process and capacity. If what you need changes, then at best you spend billions making changes and at worse you spend tens of billions starting over.
Better for Apple to do what they are doing now, investing in existing Intel and TSMC fabs based in the US and helping them fund new US-based fabs on newer processes (I don't see TSMC ever letting their absolute latest processes leave Taiwan). That way, you have first-access to the product. This is what Apple did with TSMC in Taiwan to help them scale to the levels they are now.
Reports state Apple's latest DRAM contracts are twice as expensive because they are out-bidding every other smartphone OEM, so either those "cheap" Android smartphones will not be so cheap, or they just won't be available due to lack of DRAM to put into them.
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The AI bubble doesn’t mean the technology is useless. Just that the current level of investment and lack of demonstrable returns is unsustainable.
I think there will be plenty of useful tech to pick up off the scrap heap. But right now AI is driven by marketers and hype men burning mountains of cash for lousy returns.
Remember, this is a manufactured crisis. We should NEVER have relied on just three memory manufacturers. There never should have been any tariffs. AI should've only been allowed to buy parts they had cash to pay for, but their access to unlimited funds has driven prices to the Moon.
And Timmy? "We know what we're good at" is not a good reason to avoid building your own foundry. A company of your size knew decades ago that demand was surging for these parts. Ever heard of vertical integration? It saves you money in the long run. THIS is why you LEARN how to make memory, so you aren't flat-footed when supply is constrained.
What kind of company this size can't walk and chew gum at the same time?!
And Timmy? "We know what we're good at" is not a good reason to avoid building your own foundry. A company of your size knew decades ago that demand was surging for these parts. Ever heard of vertical integration? It saves you money in the long run. THIS is why you LEARN how to make memory, so you aren't flat-footed when supply is constrained.
What kind of company this size can't walk and chew gum at the same time?!
zoozx
macrumors 6502a
You mean like when the prices came back down after that Covid thing ?
Black_Mage
Contributor
That was one of the reasons I got a MacBook Pro with more than enough RAM. Between my Studio and my MacBook Pro, I'm good for several years.