Apple to pass memory cost increases on to consumers

Summary

Apple shares rose after CEO Tim Cook indicated the company will pass rising memory costs to consumers to protect margins. Analysts estimate $200–$300 cost increases per phone, with Apple expected to push hikes onto Pro models where buyers are less price-sensitive. The pricing move coincides with an AI-driven upgrade cycle as older iPhones won't support the new Siri, creating a strong catalyst. China market share was noted as the biggest risk.

• Tim Cook says Apple will not fully absorb surging memory costs and will pass some to consumers.
• Counterpoint analyst estimates component cost hit of $200 per phone; Tech Insights sees need for $300 increase on Pro model.
• Apple expected to protect entry-level pricing and push increases to Pro devices and higher memory configurations.
• Apple's gross margin was just shy of 50% last quarter; pricing power is used to maintain profitability.
• AI-driven upgrade cycle seen as catalyst as over half of iPhones since 2022 won't support the new Siri.
• China market share flagged as the biggest risk, but the segment was cut off before detailed discussion.
• The Intel deal mentioned by the President was noted but not detailed.