Apple will increase prices in response to memory chip costs rising in the AI boom. Investors react quickly and buy supplier shares.
“Unfortunately, price increases are inevitable,” Apple CEO Tim Cook told the Wall Street Journal. The entire industry has been struggling for months because the large-scale construction of data centers for artificial intelligence means that memory chip capacities are insufficient – and prices are skyrocketing accordingly.
Cook did not provide any information on when, how much and for which products the prices would be increased. As usual, the next big presentation of new devices is expected in autumn with the new iPhone generation. Apple sells the current iPhone 17 in Germany at a price starting at 949 euros and the better-equipped iPhone 17 Pro starting at 1,299 euros. According to the financial service Bloomberg, Apple wants to expand its model range with a foldable iPhone this year.
“Huge” cost increases
Apple has so far been able to keep device prices largely stable for customers thanks, among other things, to long-term delivery contracts. Apple is doing its best to cushion the “huge” cost increases and not pass them on to customers, but this is no longer possible in the long term. Apple had already mentioned in recent months that the increased storage costs might require countermeasures, thereby keeping the door open for price increases.
Some PC manufacturers and game console providers have already increased their prices. Other large electronics suppliers have also recently reported that the cost increases for memory chips have reached a level that cannot be digested without higher prices for customers.
Memory chips from China?
Chip companies are expanding their capacities – but this is a lengthy process in the industry. In addition, storage types required for data centers could be preferred. China, meanwhile, has large state-sponsored storage producers – but US companies are likely to face tough restrictions on working with them. Asked whether rules should be relaxed, Cook told the newspaper he believes all options should be considered. “I think we should look at the entire offer.”
Chinese Apple suppliers are benefiting from price increases announced by Apple CEO Tim Cook. Among others, Lens Technology in Hong Kong rose by 5.94 percent to 29.96 Hong Kong dollars, Luxshare Precision Industry in Shenzhen rose by 3.88 percent to 69.93 yuan and Foxconn Industrial Internet in Shanghai rose by 7.49 percent to 78.08 yuan. Apple shares ended trading on the NASDAQ on Wednesday 1.10 percent lower at $295.95 and were trading 0.21 percent higher at $296.56 on Thursday.
dpa-AFX / Dow Jones Newswires
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