alt Hacker NewsIsn’t Apple potentially under a lot of pressure due to the DRAM prices as well as having to compete with AI for fab capacity? Before all the price hikes their products were already priced at the top of the market so I would assume that memory getting more expensive will impact their sales or margin quite a bit as they can’t subsidize hardware like AI companies do (they can of course eat into their own margins a bit which I think they already do). So not sure if what happens right now is great for them, if the memory market collapses it will of course be good.
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> Isn’t Apple potentially under a lot of pressure due to the DRAM prices as well as having to compete with AI for fab capacity?
I'd qualify this with for now. It's not entirely clear what happens in the event the AI industry implodes, but I do think there will be a glut of memory and hardware up for grabs. It very well could crash the consumer hardware market as a result. The AI obsession and investment has burrowed so deeply across the US economy that I can't think of a single industry that won't be impacted, including agriculture.
> Isn’t Apple potentially under a lot of pressure due to the DRAM prices
Maybe. On the one hand, if there is a strong ceiling to what users are willing/able to pay for a smartphone (might not be true, with all those people making $$ on the stock market), they will have to cut prices.
On the other hand, if one part gets more expensive, premium phones need smaller relative price increases than budget phones. Certainly, if they are willing to accept lower margins, premium product might get more attractive.
Also, iPhones tend to have less RAM than competitors, so this might hit other premium manufacturers harder than Apple.
Yes it does impact all hardware makers and they raised prices as a result. But again remember the financial reality here… DRAM is in short supply because of the demand for models propped up by VC subsidies and infrastructure providers going deeply into debt to buy all this stuff just as folks are realizing we’re on track to over build capacity. So yes Apple gets impacted a bit in the short term but in the long term they’ll gleefully watch it all burn.
Sure, but DRAM is a commodity and is classically cyclical. This is a particularly large cycle but so long as the historic pattern holds (and there's not a ton of reason to think it won't unless the hyperscalars can go into greater debt indefinitely which given inflation and interest rates they can't) Apple just needs to get through this peak in prices, which they have a LOT of ammunition to do so.
Having to raise prices isn't a great look but when they come out the other side they can drop pirces and get a boost in volume or they can keep them high and enjoy a bigger profit margin.
Let's be real here, Apple does not have to compete with AI for fab capacity, they can outbid anyone if they want. They have more money and longer contracts then anyone else. Apple customers will just end up paying for said DRAM price inflation.
The ones who will actually suffer is Apple 2.0 (presumably a different competing company), start ups, research, companies that are not worth trillions.
Couldn't Apple afford to make it's own RAM fab etc at this point and have a dedicated pipeline of parts for its own products?
They are, for now; but also Apple is known for making long term price locked contracts and ensuring availability of semiconductors for their devices.
Everyone is paying more for RAM these days, I expect Apple to maintain their margins.
Apple already had giant margins before and could easily absorb memory price increases. The fact that they did not and instead decided to increase prices shows how confident they are that people will buy their hardware anyway.