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

BGrifter said:
This is it, none of the results justify the unprecedented levels of economic disruption.

There’s likely to be useful things to come out of AI development. But it can also be developed without shovelling mountains of cash and resources into a volcano. Just might take a little longer.

I think AI enthusiasts should be the most eager for the bubble to pop. Blast the marketers and conmen out the airlock to make room for smaller more sustainable development lead by the science.

It’s hard to get people excited about useful improvements to a spreadsheet when the guy down the block is promising they’re birthing AI Jesus.
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Do you have numbers for the "unprecedented levels of economic disruption"? It must be worst than the 1929 stock market crash then, worse than major wars etc.
 
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youdontsay said:
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.
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I don't think unsustainable only means losing money (being in the red). It can mean decreasing profits to the point of having to make major negative changes to the company. If you expect any company to operate at cost, that's highly impractical.
 
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alphaod said:
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.
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Im still happy with my iPhone 13 also. Im really in no rush to upgrade it this time.
 
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JPack said:
Funny how some people still think AI is a "bubble."
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I don't think anyone doubts the capabilities of AI or its profound effects on the economy and society. But that doesn't mean it's not a bubble: the money going in to money-losing AI companies is astronomical and it's very difficult to see the money invested today ever being paid paid back in actual revenues and profits.

Each new generation of AI models will be more efficient, each new generation of chips cheaper to purchase and run, and there's also no great "moat" surrounding AI: the technology is fairly well understood and accessible. Money invested today doesn't prevent tomorrow's new AI startups doing the same things at much lower cost.
 
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My wallet adjusting is inevitable, for millions of others as well. They raise the price of the 18 PM, will be holding onto my 17 PM. These increases are becoming BIG increases when they happen. Expecting a $100-$200 jump, easily. $300 at the absolute highest end. That foldable pricing is going to be insane but will still sell out in seconds. You know the spiel, unexpected and overwhelming demand.
 
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montycat said:
Im still happy with my iPhone 13 also. Im really in no rush to upgrade it this time.
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Same here. Still an excellent phone running iOS 18, even the original battery has lastest amazingly well compared to other iPhones I've owned (still showing 87% battery health at nearly 4.5 years!)

Biggest issue for me is the now-ancient Lightning connector since pretty much everyone else has upgraded to USB-C phones. I think I'll finally upgrade when the iPhone 18 comes out.
 
Reason077 said:
Same here. Still an excellent phone running iOS 18, even the original battery has lastest amazingly well compared to other iPhones I've owned (still showing 87% battery health at nearly 4.5 years!)

Biggest issue for me is the now-ancient Lightning connector since pretty much everyone else has upgraded to USB-C phones. I think I'll finally upgrade when the iPhone 18 comes out.
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I would grab the 17 now, it’s EXCELLENT bang for the buck wise. 18 is not coming this year, only for Pro/Max.
 
 
Reason077 said:
there's also no great "moat" surrounding AI: the technology is fairly well understood and accessible. Money invested today doesn't prevent tomorrow's new AI startups doing the same things at much lower cost.
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Very good point. The "bubble" isn't AI going away (as many people are frothing at the mouth for), but becoming a commodity. Something that goes into an OS or is a paid service if you need more than what can be provided locally by devices.
 
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Smartuser said:
Do you have numbers for the "unprecedented levels of economic disruption"? It must be worst than the 1929 stock market crash then, worse than major wars etc.
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Fair point, I should have phrased that differently. I was trying inartfully to get at the scale of investment in AI and the downstream effects it’s having on everything from laptops to MRIs.

It would be fair to say the COVID pandemic was also a greater economic disruption than AI currently is.
 
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smeagol said:
Apple was never absorbing costs to begin with because their memory tier upgrades were so ridiculously and comically expensive to begin with. Even when every other manufacturer was raising prices Apple still enjoyed a healthy margin and they rode the wave of goodwill by not raising prices. Now that high prices are the new normal, they can say finally say they don't have a choice but to pass it on to the consumer. In reality, they just want their margin of profit to be where it was before, if not slightly higher.
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I wouldn't say "higher"—I think it's unlikely Apple would use this as an opportunity to increase profits, since they'll likely be happy if they can simply maintain their profit margins (and sales volumes)—but otherwise I agree.

For instance, to see the cost at retail of RAM at current market prices, take a look at what Dell's now charging for RAM upgrades to their new XPS 16:

1781745771173.png


And here is what Apple has been charging for that same upgrade to the M4 iMac (likely since the M4 iMac's introduction, though I haven't checked that), which uses memory identical to the Dell's (LPDDR5x, 7500 MT/s):

1781745885770.png


So even Apple's pre-AI-RAM-shortage prices for RAM upgrades were higher than Dell's post-AI-RAM-shortage prices.

Thus when Cook says "we have no choice", what he really means is "we have no choice if we want to maintain our current profit margins."

There's nothing wrong with Apple doing that—they're a for-profit company, and aren't engaging in any price collusion—but Cook's spin certainly deserves a response of: "Yeah right—aren't you leaving something important out of that statement?"
 
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d686546s said:
I'm quite happy I upgraded to a 17 Pro rather than waiting. Price increases were inevitable.
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I upgraded my 13 PM to a 17 PM a couple of weeks ago. My plan was to wait for the 18 PM or even wait until the 20th anniversary model but with memory continuing to be in short supply and rising prices I decided to now might be a good time upgrade.
 
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And is that why you have to put ads in maps to make it an inferior Google Maps?
Tim, please... 🙄
 
Smartuser said:
There's a huge army of people who absolutely do, very vocally, very publicly, and also on this forum.
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Facts. Furthermore, some of the people in that army are laughing at the sheer audacity of the AI pumpers who can't see the writing on the wall. "We just need more compute, bro."

There's no AGI coming, no matter how many glorified GPUs Jensen Huang sells. "AI" is the biggest financial fraud in history. This whole thing has made clear the need for market regulation and also has exposed how many shameless "tech journalists" are paid shills.
 
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Smartuser said:
They should hire you as a CEO then. I as well like to spend other people's money.
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The point isn’t that they should, the point is that fiscally, they would be fine. Tim Cook saying it would be unsustainable I strongly suspect is hyperbolic. I suspect they would still have good profits, though not “growing profits”. I imagine that a scenario where Apple eats more cost and has lower profits would be temporary. On the flip side, I find it harder to imagine that if Apple raises prices, and the market stabilizes back to reasonable levels, that Apple would then lower their prices in kind.

My thinking changes if it is so bad that they would effectively be operating at cost.
 
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Smartuser said:
Very good point. The "bubble" isn't AI going away (as many people are frothing at the mouth for), but becoming a commodity. Something that goes into an OS or is a paid service if you need more than what can be provided locally by devices.
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Yeah… I think “bubble” is often misinterpreted this way. Reality is that it would probably resemble the dot-com bubble. The internet certainly didn’t go away.
 
Smartuser said:
Of course there's going to be consolidation. But not the total implosion that people who know nearly nothing of AI but post with 200% conviction wish for.

Hardly anyone here will remember this, but there was a 4 year long stagnation in memory chips between 1992 and 1996. Every regular PC had 4 MB of RAM. Then Windows 95 was released in 1995, needed 8 and a short time after that, RAM prices declined very fast until a few years later, everyone suddenly had 4 GB of RAM. This goes against the theory that consumers needing more will necessarily raise prices.

Every few years, some components hit a wall, but situations also have an interesting way of fixing themselves after tome time.
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Smartuser you may be 'smart' but I do remember the period you are discussing and I know rather more than you think about AI. This is nothing like the period to which you are referring and is driven by a completely different set of conditions. The intimation from someone like yourself that I know nothing is an insult based on absolutely no knowledge of my background. I have intimate knowledge of the current build out of AI infra structure and what is driving our current lack of RAM. I believe that this RAM shortage will abate , as I said, but a consolidation in the AI infrastructure build will occur. I am just not sure of the time line. Maybe you do?

Please stop making assumptions about everyone who posts on this forum. We are not all 'stupid' as I think you are intimating.
 
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Mac Studio will be topping out around $18-20k, I guarantee it.

I also expect the Macbook Ultra, if it is in fact a new higher tier chip, to start at $3499 and $5k or greater for the ‘good one’.
 
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