The Fruity Cargo Cult Apple is preparing to lift prices and is blaming AI server greed rather than the need to maintain its margins.
According to the Wall Street Journal the Fruity Cargo Cult Apple supreme dalek Tim Cook said that the increases had become impossible to dodge.
“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.”
Cook would not say when the price rises would land, how big they would be or which products would be hit. Job’s Mob is expected to launch the iPhone 18 line in September, with a foldable iPhone tipped to join the lineup.
Macs and iPads might get clobbered sooner. Job’s Mob raised the starting price of the Mac Mini last month between launch events.
Artificial intelligence outfits have been hoovering up memory and storage chips for servers, sending prices skyward. Research outfit TechInsights reckons keeping margins intact would add about $270 to the next iPhone Pro.
That would push the expected iPhone 18 Pro towards $1,299, which is a lot of cash for the faithful to keep the blue bubbles flowing.
Cook said both memory and storage prices were causing problems, but he put special focus on DRAM. High-bandwidth memory for AI servers is grabbing more supply, leaving consumer gadgets scrabbling around.
“There’s less supply at a time when consumers want devices and the memory guys are passing along huge price increases. We definitely need memory pricing and supply to return to reasonable levels for consumer products. That’s the bottom line,” he said.
Samsung, SK Hynix and Micron dominate the DRAM market. NAND makers include those three, Kioxia and Sandisk, whose shares and profits have gone bananas during the past 12 months.
Micron and SK Hynix shares have risen more than 800 per cent, while Kioxia and Sandisk have jumped 4,600 per cent. Memory companies are building more factories. Morgan Stanley expects DRAM wafer capacity to grow 30 per cent by 2027, but consumer tech could still fall 15 per cent short of demand.
China has national champion memory and storage outfits, but US national security rules make them tricky suppliers for American companies. Cook said the rulebook should not be treated as sacred scripture.
“I think everything needs to be on the table. I think we should look at all supply.”
Morgan Stanley expects US smartphone and PC prices to rise 15 per cent this year. That might barely move the consumer price index, but an iPhone price rise will still make Washington twitch.
Job’s Mob has another problem. Its rebooted Siri, announced last week, needs more DRAM, because apparently even a smarter assistant needs more expensive brain space.
The company has long used NAND storage upgrades to fatten margins. It charges $100 to $200 for extra storage increments that cost a fraction of that.
Cook said Job’s Mob was willing to use its cash pile to boost memory supply.
“We’re willing to use our balance sheet to help be a part of the solution. Obviously, more capacity is needed.”
Cook said Job’s Mob would not use its cash and chip design experience to build memory and storage fabs.
“We can’t do everything. We know what we’re good at.”
Historically, Job’s Mob used its size to squeeze suppliers, playing them off against each other and leaving them with thin profits. AI companies have now barged into the market and made the old trick less useful.
Cook said that across his supply chain career at IBM, Compaq and Job’s Mob, he had not seen anything like the past six months.
“This is a hundred-year flood, I’ve never seen anything like it in any area in over 40 years,” Cook said.
