Apple's price hike choice almost guarantees more expensive i Phones as the RAM crisis is far from over: 'We are not at the bottom and will take more time to climb out,' expert says | Tech Radar
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Apple's price hike choice almost guarantees more expensive i Phones as the RAM crisis is far from over: 'We are not at the bottom and will take more time to climb out,' expert says
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We now know with more certainty than before that your next i Phone, especially if it's a more affordable model, will probably be more expensive come September.
At approximately 8:30AM ET the RAM crisis reached Apple shores in the form of price hikes across multiple product categories, including Mac Books, Macs, i Pads, and Home Pods.
It was inevitable and, as Apple told us, the culprit is clear: "The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage."
It's the component crunch we've seen repeated over and over again. Everything from the latest gaming rigs to storage and memory is getting more expensive.
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"We are not at the bottom and will take more time to climb out," wrote Creative Strategies Founder and longtime analyst Tim Bajarin when I asked him via email if this marked a tipping point for our RAM crisis travails. It did feel like Apple held off as long as possible, and I think Bajarin concurs, "Apple had no choice," he wrote to me.
Not only does Bajarin see the issue continuing, but he thinks it could drag on for years. As he wrote in his recent Forbes column, with just a few major memory factories already "maxed out" and those under construction years away from coming online, "I see this memory squeeze at the least lasting another two years," he told me via email.
This aligns, by the way, with reports we've seen elsewhere from those who run these memory plants.
"We expect tight conditions to persist beyond calendar 2027 as a result of AI-driven demand across all segments coupled with structural supply constraints," said Micron CEO Sanjay Mehrotra in a recent earnings report.
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We've all been wondering if and when the RAM crisis would affect i Phone prices, and while the fresh price hikes miss out i Phones, Apple Watches, and Air Pods, Apple's comment on why it raised the prices now, makes it clear that they're probablly not done: "We have shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products, including today’s increases for i Pad and Mac."
Did you pick up the key phrase? "need to begin raising prices". Apple didn't say, "we've raised the prices," and instead opened the door to further hikes.
Those price increases might come to the full lineups in affected product categories, but I believe that this issue will affect the anticipated i Phone 18 launch in September.
Bajarin says the price/performance trajectory we've seen for decades (more and faster/better tech for lower prices) is, with this component crisis reversing itself, making it harder to build affordable devices, or rather devices at affordable prices, because one of the key components is exponentially more expensive than ever. We already have some evidence of this with Nothing cancelling its affordable model in response to RAM crisis.
This means that those who usually buy the i Phone Pro, i Phone Pro Max, and i Phone Air might easily absorb higher prices because they can probably already afford them.
It's with base models like the anticipated i Phone 18 where a dramatic increase could push the phone out of reach. This will, by the way, affect Android phones too (see Nothing, above), especially, Bajarin notes, those affordable handsets sold around the world.
You see, they all source their memory from the same handful of suppliers. It's all in shorter supply and more expensive.
In the end, if any of us thought Apple could hold out indefinitely and show the industry a way around this AI-led RAM crisis (the AI boom isn't slowing down, and its demands on energy, water, and memory will probably only increase), they were mistaken. Apple isn't magic, RAM doesn't grow on trees, and we're in for a very rough couple of years.
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A 38-year industry veteran and award-winning journalist, Lance has covered technology since PCs were the size of suitcases and “on line” meant “waiting.” He’s a former Lifewire Editor-in-Chief, Mashable Editor-in-Chief, and, before that, Editor in Chief of PCMag.com and Senior Vice President of Content for Ziff Davis, Inc. He also wrote a popular, weekly tech column for Medium called The Upgrade.
Lance Ulanoff makes frequent appearances on national, international, and local news programs including Live with Kelly and Mark, the Today Show, Good Morning America, CNBC, CNN, and the BBC.
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