Will Apple Raise iPhone Prices Due to Skyrocketing Memory Chip Prices?
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 StrategyTags: DigiTimes, TrendForceThis article, "Will Apple Raise iPhone Prices Due to Skyrocketing Memory Chip Prices?" first appeared on MacRumors.comDiscuss this article in our forums
