Apple has lost $265 billion off its market cap the day it announced price hikes on MacBooks and iPads. And part of it is the company’s own fault.
Apple increased Mac and iPad prices dramatically across the board. The hikes are due to the rising cost of memory and storage chips.
Here are the changes: MacBook Neo: $699, up from $599
- MacBook Air: $1,299, up from $1,099
- MacBook Pro: $1,999 up from $1,699
- Mac mini: $799, up from $699
- Mac Studio (M4 Max): $2,499, up from $1,999
- Mac Studio (M3 Ultra): $5,299, up from $3,999\
- MacBook Neo, $699, up from $599;
- iPad Air, $749, up from $599;
- iPad Pro, $1.199, up from $999;
- Vision Pro, $3,699, up from $3,499;
- HomePod mini, $129, up from $99.
All of the price hikes aren’t Apple’ fault, but in an editorial for “Macworld” (which you could definitely read), David Price says that the “severity” of the hikes show Apple’s greed (and I agree).
From his article: The MacBook Neo’s 16.7 percent rise may be justified because the profit margin on products in that category tends to be tight; if the cost of the RAM doubles or even triples, there’s very little wiggle room in the rest of the spec to absorb that increase, and you can quickly find yourself selling at cost or even at a loss. But it’s hard to view the 25 percent bump on the Mac Studio with M4 Max, a premium product set up for low volume but very high margin, as anything other than greed.
We should bear in mind, too, that Apple hasn’t been “shielding” us from price rises out of the goodness of its heart. It simply had the market leverage to insist that suppliers prioritize Apple products when allocating components. Losing a contract with Apple is such a catastrophe that the company can insist on preferential treatment, and thereby maintain its margins without having to raise prices. The fact that Apple has now raised prices so dramatically doesn’t mean that it couldn’t cope with low margins any longer, but rather it indicates that it didn’t want to put up with low margins at all.
More than almost any other company in the world, Apple–with its fat reserves of cash and enviably high margins–had the capacity to take the hit on this one. Putting the prices up at this moment and to this extent was a choice.
In fact, in remakes to the The Wall Street Journal, Micron’s Sumit Sadana, executive vice president and chief business officer, said the company was unable to fund capacity expansion during the industry’s previous slump, a period when its margins turned negative partly because some buyers pushed relentlessly for lower prices.
“We told a couple of the customers who were being very aggressive with pricing at that time that this is not constructive,” he said. “ A lot of the industry investments got shut down in 2023 because of really poor pricing and really poor margins.”
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