Apple is on the verge of increasing its product prices due to the longstanding memory cost problems. While the iPhone maker was not expected to face the issue this early, it seems the “memory cost surge” crisis is becoming common for every brand.
Tim Cook, the CEO of Apple, recently had an interview with The Wall Street Journal, where he mentioned that the company is considering raising its product prices to get relief from the memory and storage chip cost surge.
AI is another factor that urged Apple to think about “price increase” for its products like iPhones, Macs, and iPads. According to Tim, the strong demand for AI in data centers led to a reduction in key components and drove prices.
Many Chinese brands have already increased the price for both newbies and some existing models. Huawei has also announced price adjustments for its products to prepare itself for rising component costs. And now, Apple is on the same path.
Cook mentioned that the company can’t avoid price increases anymore. Even though Apple is making efforts not to enter this phase, the memory cost situation is gradually getting worse.
Apple CEO said:
“Unfortunately, price increases are unavoidable. 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.”
The CEO added that memory and storage costs have become major concerns for Apple at the moment. HBM chips are the main components for the supply to AI servers.
Per Tim, there’s less supply at a time when consumers want devices, and the memory guys are passing along huge price increases. And the bottom line is that brands need memory pricing and supply to return to reasonable levels for customer products.
While China has the top native memory and storage firms, US companies can not directly link with them as they will require licenses under security regulations. Tim responded – Everything needs to be on the table. I think we should look at all supplies when the host asks if restrictions should be eased.
(Image Credits: Weibo)
