Apple Price Surge: Tim Cook Blames ‘Century Flood’ in RAM Market

It’s still too early to assess the impact on sales from Apple’s significant price increase implemented on June 25 on several products, including Macs and iPads. The impressive financial results revealed last night encompass the April, May, and June quarter. In light of similar reactions from competitors due to the spike in RAM costs, Apple does not anticipate a drop in sales next quarter: the company projects a revenue increase of between 9% and 11%.

Tim Cook Discusses Pricing Strategy

Last night, Tim Cook was questioned once again about his pricing strategy. The CEO of Apple stated that the price hikes were made reluctantly. “I would say we did it because we are experiencing what I would call a ‘centennial flood’ in the memory market, characterized by an exponential rise in prices; that’s what motivated our decision.”

Tim Cook confirmed that the price increases were not uniform across different product lines, following a more complex logic: “we look at units, revenue, and margin, then make a commercial judgment on how to handle it. So, it’s not a mathematical formula that leads us to a specific outcome, or just one aspect of it. We consider all three dimensions and think about it in the long-term rather than on a 90-day clock.”

For the upcoming quarter, Apple expects memory prices to continue rising. Tim Cook explained that Apple had so far benefited from “carried over stocks” purchased at lower prices, an advantage that will gradually diminish. The Apple chief also revisited his plan to source from Chinese supplier CXMT, currently on the Pentagon’s blacklist: “It’s clear that having a greater number of suppliers would be beneficial; it would help us in terms of supply and perhaps on pricing. The impact on prices remains uncertain, but the supply situation could improve. We are therefore exploring all options.” This possibility has sparked significant controversy in the United States.

Potential Future Price Increases

Apple has already hinted that more price increases are expected, preparing consumers for a possible hike in iPhone prices come September. The company will try to keep the increase minimal for entry-level models, but different storage tiers could see significant price jumps. According to estimates available, producing a 1 TB iPhone 18 Pro Max would cost $300 more than a similarly equipped iPhone 17 Pro Max from the previous year…