Apple's second quarter earnings call was yesterday, and with it came a lot of very good news about the company's financial situation — including that the iPhone 17 is the most successful iPhone series ever made. Sadly, Apple also confirmed something we've been fearing for a while, and it could likely mean price hikes going forward.
Tim Cook, who is stepping down as Apple CEO on September 1, confirmed that Apple was "partially unaffected" by the ongoing memory shortage during Q2. The fact Apple already had a stockpile of devices ready to sell helped mitigate the issues, but that's about to change. Cook confirmed that the June quarter will see "significantly higher memory costs."
Cook didn't confirm any plans on what will happen beyond June, but added the rising memory costs will "drive an increasing impact on our business, and we will continue to evaluate this." Cook also said Apple will "look at a range of options" to handle the issue and did not want to clarify any further plans.
How will this affect prices?
This doesn't absolutely confirm that price increases will happen to these devices, but big businesses aren't in the habit of absorbing high costs if they don't have to.
Apple does have a lot of buying power, which means it's better equipped to handle supply chain disruption than its competitors. But it's still going to have to balance its own needs with those of its customers.
We already know that Apple agreed to a 100% price increase for the memory it acquires from Samsung. And we know that because Samsung told us, not Apple. Given how private Apple likes to keep its internal operations, who knows what other component price increases have happened behind the scenes?
The question is, will Apple increase prices to maintain its profit margins, or will it keep those prices relatively stable to encourage people to buy iPhones and Macs? The more devices they actually sell, the more potential there is for increased service revenue — generated from the App Store, cloud storage and other Apple subscriptions.
We could even see a mix of the two, with Apple absorbing some of the cost to minimize price increases and hopefully avoid major consumer shock.
Some supply is already limited
Cook also made it clear that the main issue with maintaining supply has been "availability of advanced nodes [Apple's] SOCs are produced on" rather than the memory itself. This means shortages have primarily affected the iPhone so far, and will likely have a bigger impact on MacBook Neo, Mac mini and Mac Studio from June, due to the devices' popularity and AI tools.
According to Cook, this is because demand for those devices has far exceeded its expectations, particularly with MacBook Neo. So the current shortages affecting these devices are not necessarily down to RAMageddon, but because they're just so appealing to consumers.
Sadly, this, combined with the goings on in the world, means that Mac mini and Mac Studio may be hard to get hold of for the next several months. MacBook Neo restocks were not mentioned at all.
Hopefully, Apple will avoid raising the price of devices that are already on sale, which is more than we can say for some of its rivals. As for the upcoming devices, like iPhone 18, I'd be bracing myself for a potential price increase — even if those rumored cost-saving downgrades still end up happening.
