Tim Cook Says Apple Price Increases Are 'Unavoidable' Due To Memory Costs (macrumors.com) 73
An anonymous reader quotes a report from MacRumors: Apple is raising its prices to offset the high cost of memory and storage, CEO Tim Cook told The Wall Street Journal. Apple is no longer able to absorb the increased prices and will need to pass some of the cost on to consumers. "Unfortunately, price increases are unavoidable," said Cook. "We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers from the increases, but the situation has become unsustainable."
Growing demand for memory and storage chips from AI companies has led to chip shortages and higher costs. The Wall Street Journal suggests Apple will need to increase device costs "substantially" to maintain its current profit margins given the cost of memory chips and SSDs. Research firm TechInsights claims Apple will need to make the iPhone 18 Pro around $270 more expensive to keep its existing profit margin.
Apple is struggling more with memory chips, but storage chips are also an issue. "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," Cook told The Wall Street Journal. Cook said Apple will use its cash to increase memory supply, but he did not give details on what that means. Apple does not plan to create its own memory and storage factories. "We can't do everything," Cook said. "We know what we're good at." Cook likened the memory shortages to a hundred-year flood. "I've never seen anything like it in any area in over 40 years," he said.
Further reading: Smartphone Market To Shrink 15% This Year Due To Memory Crisis
Growing demand for memory and storage chips from AI companies has led to chip shortages and higher costs. The Wall Street Journal suggests Apple will need to increase device costs "substantially" to maintain its current profit margins given the cost of memory chips and SSDs. Research firm TechInsights claims Apple will need to make the iPhone 18 Pro around $270 more expensive to keep its existing profit margin.
Apple is struggling more with memory chips, but storage chips are also an issue. "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," Cook told The Wall Street Journal. Cook said Apple will use its cash to increase memory supply, but he did not give details on what that means. Apple does not plan to create its own memory and storage factories. "We can't do everything," Cook said. "We know what we're good at." Cook likened the memory shortages to a hundred-year flood. "I've never seen anything like it in any area in over 40 years," he said.
Further reading: Smartphone Market To Shrink 15% This Year Due To Memory Crisis
No surprise (Score:3)
No surprise here. Why is this even news? Every product that uses memory is raising their prices. This "story" is merely Apple mollifying their customers.
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Perhaps it's because Apple have a $1 Trillion cash flow sitting in the bank and not wanting to off set a bit to cover the temp price hikes, so got to fleece the Apple customers some more
Re:No surprise (Score:5, Informative)
Perhaps it's because Apple have a $1 Trillion cash flow sitting in the bank and not wanting to off set a bit to cover the temp price hikes, so got to fleece the Apple customers some more.
I think you are confusing that Apple stock is over $1T with Apple having $1T in cash in the bank. They do not. According to their annual report [cloudfront.net] dated September 25, 2025, they had about $35B in cash.
Re: No surprise (Score:2)
Re:No surprise (Score:5, Informative)
they had about $35B in cash.
They also have Marketable securities worth $18.763 billion and stuff. And long-term assets. But then they also have current and long-term liabilities. The difference between total assets and liabilities, ignoring PPE, comes to about $24 billion. Their income after tax for the financial year was $112.010 billion. So where did all that money go?
"Common stock repurchased" $90.052 billion and $15.413 billion in dividends.
Turns out, the bulk of the profits are going into stock repurchase programs.
Re: No surprise (Score:2)
Profits either go under the mattress, go out as dividends, invest in themselves one way or another, or used to buy someone else. That is any public company in a nutshell.
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Re: No surprise (Score:1)
They no more have a trillion dollars than Elon Musk does. There's a massive difference between money and speculative valuation.
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Apple does not manufacture their own CPUs. They contract TSMC to make them. Apple also does not manufacture their own SSDs, cameras, etc. Of all the components, RAM is a commodity component that survives on thin margins relying on high volume for profits.
Building a chip fab would take years if Apple had the site, the personnel, plans, permits, etc. today. Then it takes an experienced foundry like TSMC about a year after construction is complete to start making enough acceptable product in volume. So 3 or
Wow (Score:2)
You know things are bad when Apple's top procurement guy can't even get any good deal rates anymore.
Yeah, we're fucked.
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Re:Wow (Score:4, Informative)
Apple has enough money to invest in additional production capacity.
I don't know if you've checked recently but Apple does not make RAM. They don't actually manufacture chips. They contract TSMC to make their CPUs. They buy commodity chips like RAM.
No one wants to dump billions investing in new manufacturing capacity that will take at least a year to come online and may only start producing when the market returns to normal though.
Yes that's why the RAM manufacturers (which are not Apple) are charging lots of money now for RAM.
Apple certainly can afford to take that risk and if the memory market continues like it is for the next few years then Apple would make an absolute killing with such a move.
1) There is a difference between having lots of money and having the resources to do something. Apple does not manufacture RAM. 2) How would Apple "make a killing" again? Apple does not sell components to anyone. Apple will certainly do everything they can to secure supply of components; they do not sell components like RAM, CPUs, etc.
Re:Wow (Score:4, Interesting)
I remember reading somewhere that Apple kind of foresaw this coming and purchased extra memory so they wouldn't have to raise prices as long as possible.
It looks like they've reached the end of their extra supply.
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we're fucked
Perhaps not. There are Chinese fabs that can't make HBM, but can make DDR5. Corsair is now (as of about 2 weeks ago) selling modules with CXMT RAM. That's the first time one of the "major" RAM module manufacturers have turned to Chinese chips.
That may be the answer to the DDR5 shortage over the next year or so.
I know where this is going (Score:5, Funny)
Apple is doing the meme. [imgflip.com]
Re: I know where this is going (Score:2)
My thoughts were pretty much in line with this, though even before this shortage, apple's effective price for ram still makes today's ram prices look cheap. And they don't even use particularly good components, they use sk hynix, who makes the absolute shittiest ram you can buy. And then they convince their customers that it's a premium product worth paying a premium for -- basically selling their customers a polished turd.
Yeah... (Score:1)
the shareholders still have to get their daughters a new mercedes this year, so...
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Has the rise in the cost of RAM (Score:3)
even overtaken the Apple tax? Their infamously charge a metric fuckton for machines with extra memory. Their base machines may be competitive, but individual spec boosts or their separate components certainly weren't. Just look back a few years to see articles talking about just how insanely expensive Apple RAM was:
https://wccftech.com/apple-sel... [wccftech.com]
700% higher than comparable Corsair back in 2019.
Memory is currently 400% higher than it was in 2024.
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Or (Score:1, Funny)
Radical idea: that fat cats that have been getting rich beyond belief for decades could take a tiny bit less and not pass the cost on to the consumer for once.
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They could build a memory fab of their own from petty cash if they actually wanted to... but they don't. They would rather raise prices and blame others.
Which RAM manufacturer should they buy and with what money? Micron, Samsung, and SK Hynix are all public companies worth over $1T each. Apple does not have over $3T in cash. But somehow that's their fault that RAM prices are so high and they have not solved the problem.
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If they can develop their own processors, they can certainly do their own memory!
The problem with memory is manufacturing them at the lowest costs not developing it. Memory is standardized and considered a commodity due to the huge number of patents surrounding it. The problem right now is the RAM manufacturers are getting lots of money not to make consumer grade RAM like DDR5. They are getting lots of money to make HBM for AI servers. Where would Apple make this RAM? Certainly not at Micron, SK Hynix, or Samsung. TSMC could manufacture if they were not fully booked making AI CPUs, AMD
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They developed their own processors and have them manufactured by a third party.
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I bet if they wanted to buy a $1T company they could. It wouldn't be all in cash, but their market capitalization is over $4T. Sell a few $100B in bonds, issue new stock, talk with a few bankers, ... Antitrust laws (not just in the US) might prevent an acquisition but not the financing.
That said, they probably don't want to. A large acquisition can be very, very distracting to management and is usually a new loss over time.
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Sell a few $100B in bonds, issue new stock, talk with a few bankers,
This isn't a small business loan. The number of banks that could lend hundreds of billions is very small.
. Antitrust laws (not just in the US) might prevent an acquisition but not the financing.
There are other obstacles. Samsung's RAM business is a part of their chip business. They would have to separate it from their foundry business. It is highly unlikely Samsung would ever agree to that. Samsung and SK Hynix are South Korean companies. I would think the country of South Korea would object to the sale. That leaves Micron which is in the US. That's where Dell, HP, Lenovo, Asus, etc would all s
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Buying an existing company is not going to bring the prices down. The supply remains the same. And spending $1T for memory is crazy. Instead like the MP said, "They could build a memory fab of their own from petty cash if they actually wanted to... "
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And spending $1T for memory is crazy. Instead like the MP said, "They could build a memory fab of their own from petty cash if they actually wanted to... "
Building one would take years if Apple had the personnel, the expertise, site, etc. And at the end of the it, Apple built a manufacturing plant that does not fit into their strategies. After all, Apple does not manufacture their own CPUs. They contract TSMC to make them.
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That's only realistic if you expect this expansion to continue indefinitely. But it is almost certainly a bubble because it's unlikely that an advance in AI will come soon enough to justify all of the expenditure. (It's not impossible...)
Having to find and purchase property, get permits (even with substantial grease) and actually get everything lined up and in hand and made into a fab is a lot. If you can get it done in 24 months you're doing very well. And that's just the fab part of the business...
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You don't buy a RAM company, you start one.
How long do you think it would take to "start a RAM company"? If Apple had the personnel, site, plans, equipment, etc, it would take years for them to build the plant. Then the plant does not make 100% sellable product on day 1. That might take months to a year. So 3 years from now, Apple might, maybe have a few chips they could use.
The existing companies refuse to expand to meet demand, which is the whole reason for this mess.
Um no. They existing companies are being lots of money to make specialized memory for AI. They are meeting demand. They are meeting demand of people who are paying them the most
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The existing companies have the same challenge as any newcomer:
They have to build a new plant.
Similar to a nuclear power plant: that is a 10 years adventure.
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And starting a new company entails far more than just filing paperwork. Apple doesn't have people who know how to make RAM, they'd have to find the talent. They'd have to license or invent the designs. Giving an established firm cash to build new facilities to make your chips makes more sense.
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Unless it's one I don't like.
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I agree but that's not the issue here. The issue is a massive RAM shortage, because of the AI corps.
The solution doesn't involve guillotining trillionaires who make computers and charge what the market will bear, it involves guillotining trillionaires who own AI companies.
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The solution doesn't involve guillotining trillionaires who make computers and charge what the market will bear, it involves guillotining trillionaires who own AI companies.
Rather than guillotining anyone, the solution ought to be regulating the growth-rate of data centers so that they don't eat the economy. There's no reason to allow them to grow "as fast as possible" when it's not even clear how useful they'll be long-term. Unregulated capitalism leads to violent boom/bust cycles which cause economic pain.
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Oh no less than 300% profit margin! what to do! (Score:3)
Heaven forbid Apple have to forego their insane profit margins in the name of consumer affordability. They'd rather charge you$18000 for a slab of glass than let go of 300% profit
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Heaven forbid Apple have to forego their insane profit margins in the name of consumer affordability. They'd rather charge you $18000 for a slab of glass than let go of 300% profit
Yeah, pretty much.
I'm mostly an Apple user. I own a Mac. I own an iPhone. This has been true since late last century and 2007, respectively. I do not own an Apple tablet.
I was shopping for a tablet the other day to use for viewing sheet music, and the only hard requirement for that sort of thing is that it must not be significantly smaller than 8.5x11. The smallest Apple device that met that requirement was the iPad Air 13-inch for $750.
So I decided to see what sort of Android tablets existed. I ended
Re: Oh no less than 300% profit margin! what to do (Score:2)
Not seeing it
https://www.sellcell.com/blog/... [sellcell.com]
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Apple runs about 25% profit margin overall. That's very healthy but I wouldn't call it obscene.
If you insist on calculating margin as the sales price minus unit manufacturing costs, you would be suggesting other expenses - such as R&D and employee wages - don't count.
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Small Violin (Score:4, Interesting)
A lot of factories run on a 10% or less Net Profit. These guys have to raise prices or go under. Apple is going from an obscene profit to a profit that 99% of the world can only dream about.
Apple could easily eat the cost increase, but when pure greed drives every business decision....
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Every computer manufacturer would love to have margins like Apples', and would raise their prices in a heartbeat to get them, if they could. You can call that corporate greed if you want, but it's also standard capitalism.
The more pertinent question to ask is: why is Apple able to command a premium, without losing sales, while other computer manufacturers cannot do the same?
The standard Slashdot answer will be "because Mac purchasers are idiots", but I don't think that is the reason. I think it's because
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Apple is the only (legal) source for a MacOS-running computer, and its one of the few providers of a unified-memory architecture for local AI execution
There's dime-a-dozen AMD UMA systems with AI acceleration, and their performance is pretty good, plus they all support much larger memory than most Apple systems. If all you want is AI acceleration, you can get that just fine. Apple's claim to fame continues to be their hardware design, which isn't incredibly better than literally everyone else, but really is generally pretty nice and almost always has been.
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> Cook likened the memory shortages to a hundred-year flood. "I've never seen anything like it in any area in over 40 years," he said.
100 or 40, which one is it Tim?
Both. The hundred year flood is a rare event and he hasn’t seen it. Just because it is a hundred year flood doesn’t mean it happens every hundred years.
Re: Gotto work on that math (Score:2)
You can have both, an actual threshold with an estimated 1% chance of passing any given year, and also not happened in the past 40 years. Also it's an expression for anything that feels about like those odds.
A hundred year flood can happen tomorrow, it's still considered a hundred year flood if the chance of it happening next year is still 1%.
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Burst Already (Score:3)
Lovely (Score:2)
A bunch of companies that have no hope of being profitable in the near-term hoovering up huge amounts of capital as well as causing significant global market distortions for anyone needing memory or storage. I guess the question is which of these black holes should be getting the most short interest?
no longer able to absorb the increased prices (Score:2)
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They're a public company...not a charity. If you were a shareholder, would YOU want Apple to eat these sudden supply chain cost spikes?
I wouldn't.
Re: no longer able to absorb the increased prices (Score:2)
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Nope, I'm an Android person and I'm not an investor in Apple for what it's worth.
Bold lie (Score:2)
Or you could just... (Score:1)
Eat less avocado toast. Apparently that is the solution to money problems. Geez!
Spin this into the Intel deal (Score:2)
Apollo 13 time - don't tell me about what you can't do, only tell me what you can.
Simple Solution (Score:1)
design notebooks for customer-upgradeable/swappable LPCAMM2. Guess who likes to sell DRAM with a healthy mark-up and likes to solder it to the boards?
And if LPCAMM2 is too slow, use it as a swap file (Score:2)
And before you complain about LPCAMM2 being much slower than the high-bandwidth RAM on the CPU package: It's perfectly fine to design a system with a non-uniform memory access paradigm, treating the memory behind the LPCAMM2 interface as a RAM disk. That way you have 8 GB of high-bandwidth DRAM swapping to 16+ GB of somewhat lower-bandwidth DRAM, and the soldered-in SSD lasts longer because it doesn't have to (ab)use its intake buffer to hold the swap file.
The price increase (Score:1)
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