Apple Hardware Price Hikes
Osmond Chia (Hacker News, 9To5Mac, Engadget):
Apple plans to raise the prices of its products as the cost of the memory chips it uses has surged, the technology giant’s boss has said.
Tim Cook, Apple’s outgoing chief executive, told the Wall Street Journal (WSJ) that price increases were “unavoidable” as the situation around memory chips had become “unsustainable”.
During its holiday quarter, Apple’s profit margin on hardware was 40.7%; in its most recent quarter, that dropped to 38.7% — a remarkable figure for physical products. It is these high margins that led to analysts like Ming-Chi Kuo to claim Apple would keep prices more-or-less stable and offset the additional costs through its even higher-margin — 76.7% — services business.
Winkler suggests in his summary that Apple has absorbed the cost increases so far because it has always treated memory and storage upgrades as profit centers. That’s no surprise to the Apple community, which has long chafed at Apple’s premium prices for memory and storage. But now, for instance, the price of standalone internal flash storage is closer to and sometimes even higher than Apple’s upgrade prices.
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Obviously, Apple could absorb such costs and more if it were to accept dramatically lower gross margins. But as high-minded and customer-focused as Apple is, the company is still in business to maximize profit.
I was recently looking to add another SSD and a few hard drives to my setup. Normally, prices go down over time, but currently it SSDs are about double the price I paid last year, and large hard drives are almost triple.
Apple, to my recollection, has never before issued a warning about price increases. Keep in mind that Apple deals with prices in a very different way from its competitors. For Apple, prices are part of a product’s brand, so they don’t fluctuate with component costs.
Chance Miller (Hacker News, MacRumors, Mac Power Users):
Apple has raised prices across the board for many of its products today. MacBook Neo now starts at $699 (up from $599), while MacBook Air now starts at $1299 (up from $1099). Other impacted products include MacBook Pro, iPad, iPad Air, and many more. iPhone, Apple Watch, and AirPods pricing is unchanged.
Earlier this week, I outlined three reasons for agreeing with Mark Gurman that the Apple price increases could be imminent, and that indeed proved to be the case.
iPhones have escaped the increases, but they are otherwise both broad-reaching and pretty dramatic. But perhaps the most surprising thing is that the MacBook Neo has been included …
Apple today increased the starting price of the Mac mini with M4 Pro chip by $200, taking the higher-tier model up to $1,599 on its online store.
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Apple had already raised the Mac mini’s effective starting price in May by discontinuing the $599 configuration with 16GB of RAM and a 256GB SSD, leaving the $799 model with a 512GB SSD as the new entry-level option. Interestingly, the 16GB RAM / 256GB storage option has now been reinstated, but the $799 starting price remains.
Stephen Hackett has a table of the old and new prices.
Pre-announce it with a small delay, thus giving you a temporary sales boost as people scramble to get their orders in at current prices, and to soften the blow when the increases hit.
I also can’t help but see that “we need to begin raising prices on a number of products, including today’s increases for iPad and Mac,” statement as implying more increases are coming. The iPhone price increase seems inevitable, and my money is on it starting with the new models in September.
Micron CEO, president and chairman Sanjay Mehrotra explained the SCAs in prepared remarks delivered during the company’s Q3 earnings call. He explained that Micron has signed 16 SCAs, most of them covering 2026 to 2030, and that they involve a commitment to buy a certain quantity of product and pay for it in a pricing band that has a floor and a ceiling price. The floor price covers the historically high gross margins mentioned above, and the ceiling price means those who commit to an SCA are insulated if memory prices go even higher.
Previously:
- SpaceX Acquires xAI, Goes Public, Acquires Cursor
- MacBook Neo Sales
- Hetzner Price Hikes
- 1Password’s Price Hike
- Pair Networks Price Increase
- Apple Services Price Hikes
- Price Increases for Developer Tools
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Everyone: “Vision Pro is great but the price is a big problem.”
Apple: “We are finally changing the price of the Vision Pro. Now it costs more.”
Let's show them ... why 2026 ... won't be ... like 1988.
See: Computer Chronicles 1988, "Laptop Peripherals", 22m30s.
Macintosh II: $3769 => $4869
Macintosh SE: $2769 => $3169
LaserWriter: $4599 => $4999
Apple IIgs: $999 => $1149
See also: Steven Levy, "Adventures in the RAM Trade" about the US gov't-driven DRAM crisis of 1988 that spurred these price hikes.
The 4x4TB Samsung 990 Pro M2 drives, plus the Highpoint PCI card with 4 independent 4 lane PCI channels (so it can fully soak an x16 PCI slot) cost significantly less than a single 4TB Apple SSD kit for a 2019 Mac Pro (which is 2x2tb modules).
Faster performance on the Samsungs, as well.
That was before Apple discontinued 2019 Mac Pro storage as a purchasable item a couple of years ago.
If the price increase was due to component cost increases, are they also offering more for device trade-ins? This increases the value of older devices, too, right?
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I never expect these new baseline prices to come back down.
Well, dodged that bullet. Heard Gruber pontificating about how Apple wasn’t going to raise the price until new models came out and pulled the trigger on an upgrade I was eyeing. Is he even 50/50 these days on predictions?
Will there be a point in buying a MacBook Neo after this price increase?
I mean, it’s less cheap now. And, because it was cheap, it was somehow OK that it was not able to run many new features of the upcoming major downgrade of macOS.
It’s also hard not to notice that Apple ships price increases way faster than the new Siri or bug fixes.
