code-m
macrumors 601
If this was so easy then Apple would have been producing other components in-house and manufacturing it as well.
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Will Apple Raise iPhone Prices Due to Skyrocketing Memory Chip Prices?
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code-m
macrumors 601
The prices of everything has gone up in the last few years and you expect Apple to keep maintaining the $999 starting price, got it.
$1099 almost comes across as $10.99 or $1.99 to the psychological consumer mind. $1199 would be pushing it. Same reason why products sale prices end in $XX.99 or from a range of $XX.95. Apple can absorb it by would their and for how long?
I didn’t say it would be easy. But it would be easier than building an Apple Car. Costs will keep rising and eventually the prices of devices will become unaffordable. Better to start getting a handle on it now.
TVreporter
macrumors 68030
Plutonius
macrumors G4
I don't know about existing iPhone products but, even without memory prices, Apple will raise prices on new products.
code-m
macrumors 601
To believe that initial acquisition costs to setup and run an AI data end will continue indefinite is folly. Yes, equipment upgrades happen in sections not all at once and the demand to operate said replacement may slowdown or just shrink. The future is uncertain and no point in stressing over it.
code-m
macrumors 601
When component prices dropped in the past does Apple adjust pricing? Short answer; no. When prices go up, Apple raises it slower than anyone else in the market because it leverages these well in advance. Apple is merely taking a hit on its profit margin not bottom line, it will survive until next iPhone release.
How does this work for the System on a Chip that Apple uses? TSMC gets the individual unpackaged DRAM chips from another vendor and combines them with the CPU to create one device that is then attached to the system board? Why can’t TSMC just do all of that themselves for their SoC clients?
JPack
macrumors P6
Because the transistors are very different and optimized for different purposes.
It's like asking why a John Deere factory can't suddenly assemble BYD electric busses. Just because they have four wheels doesn't mean they're the same.
A DRAM (e.g. CMXT) fab is very different in terms of equipment, chemical inputs, R&D, economics, etc. compared to a logic fab (TSMC). And a NAND fab is very different from DRAM fabs.
Each of these are very different multi-billion dollar businesses. TSMC is specialized in pure-play logic.
If Apple does, will they also drop prices when the AI bubble bursts and chip prices crater?
(We all know the answer to that. Point is Apple needs to play ahead, like they used to, and not trap themselves in a corner over short/mid-term pricing.)
(We all know the answer to that. Point is Apple needs to play ahead, like they used to, and not trap themselves in a corner over short/mid-term pricing.)
ButterF1ngers
macrumors member
MacLawyer
macrumors 65816
Are the price rises due to Bitcoin mining, Data centers, something else, or all of them?
There has been a lot of discussion lately about skyrocketing memory chip prices, and how that might impact the iPhone and other Apple devices.
For those who are not caught up to speed, prices for both DRAM and NAND storage chips have been surging lately due to increased demand from companies building out AI servers. Nvidia has reportedly surpassed Apple as chipmaker TSMC's biggest customer as a result of this boom, despite record-breaking iPhone sales last quarter.
The demand for memory chips for AI servers is so high right now that reports have indicated that chipmakers such as TSMC, Samsung, and SK Hynix cannot keep up with supply despite operating at or near full capacity. This supply-demand imbalance is allowing for chipmakers to raise prices for memory chips, with Taiwanese research firm TrendForce today estimating that conventional DRAM and NAND contract prices could rise up to 90–95% and up to 55-60% this quarter, respectively, compared to last quarter.
Apple surely still has plenty of leverage as one of the world's largest consumer electronics makers, but it is not entirely immune to the pricing situation.
On an earnings call last week, Apple CEO Tim Cook acknowledged that the rising chip prices will have a "bit more of an impact" on the company's gross margin in the current quarter. Nevertheless, Apple forecasted that its revenue will rise 13% to 16% in the quarter on a year-over-year basis, so the company still expects growth.
Cook said Apple "will look at a range of options to deal with" the rising prices, if necessary, but he did not mention any specific plans.
While the situation is rapidly evolving, it seems unlikely for now that one of those measures would be raising iPhone prices, for a few reasons.
First, Apple forecasted that its overall gross margin will remain strong at 48% to 49% in the current quarter, so the company is managing for now.
Second, Taiwanese supply chain publication DigiTimes today reported that some suppliers expect Apple to intensify its cost-cutting demands going forward. It is unclear if this refers to DRAM and NAND chip suppliers, or if Apple will try to negotiate more favorable deals with suppliers of other components to offset the impact.
Apple has historically been extremely sensitive about passing on price increases to customers, and it is known to have excellent supply chain management.
In line with that, supply chain analyst Ming-Chi Kuo recently said that Apple's current plan for the iPhone 18 Pro models later this year is to "avoid raising prices as much as possible." He predicted that Apple will "at least keep the starting price flat," suggesting that iPhone 18 Pro models will not cost more than iPhone 17 Pro models.
Kuo was specifically commenting on starting prices, so it remains to be seen if Apple increases the prices of its already-overpriced storage upgrade options.
Related Reading: Apple May Break a 10-Year Chip Strategy
Article Link: Will Apple Raise iPhone Prices Due to Skyrocketing Memory Chip Prices?
extrachrispy
macrumors 6502
They will charge whatever the market will bear. The only lever we have to pull there is to not buy what they're selling at the price they've set for it.
sleep/to/dream
macrumors demi-goddess
Really?? I have a 17 Pro on order, I hope it feels significantly better than the 15 I had, the aluminum build on that combined with the matte back felt pretty cheap, and it was tough to hold onto, sans case, without any polished surfaces
Brien
macrumors 68040
When we start seeing shortages of phones, cars, appliances etc. die to the AI bubble perhaps things will turn a corner…
I concur.
The natural titanium iPhone 16 Pro Max is as beautiful and premium as advertised by Apple.
Yet just one year later Apple’s hypocrisy is on display as they got cheap, downgrading the 17 Pro Max to cheap aluminum while attempting to convince buyers that it’s better than titanium. If that’s true why did they choose titanium in the first place?
However Apples marketing power and influence over their buyers causes most of them to believe and buy whatever Apple sells.
The iPhone 17 and 17 Pro felt like as good as it's going to get for a while so my wife and I upgraded.
Anything can happen, obviously, but I don't see this getting better soon and I can't see Apple absorbing these price increases either. So I thought it was very likely they would either lower the cost or raise the price. Time will tell.
ScanTheNavian
macrumors 6502
I view things ending like in Metro, RAM will be used instead of bullets as money. One DDR5 16GB will get you a Mac Mini 2006 and one bottle of vodka.
CATiNTHESTORE
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