Last week saw a highly unusual warning from Apple that the company will need to increase the prices of its products due to the ongoing memory shortage.
Tim Cook declined to say anything about either the scale of the increases or their timing, leading to speculation on both …
Price increases on Apple products
Tim Cook delivered the news in an interview with The Wall Street Journal.
“Unfortunately, price increases are unavoidable,” he said. “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.”
The company doesn’t generally telegraph price raises in this way, so this has led to speculation that the increases could be significant.
The price raises could be imminent
Some assumed Cook was preparing us for increased prices when the iPhone 18 Pro launches in September, and that wasn’t an unreasonable assumption. That much notice would give people plenty of time to get used to the idea, and make the price hike old news by the time it rolled around.
However, Bloomberg’s Mark Gurman thinks otherwise.
Regarding Apple price hikes, have to imagine these are fairly imminent. No other reason to flag them now. I’d also note that Apple back to school sale is very imminent, and it could make sense to tie these together as a buffer. Either way this is happening soon. Not a fall thing.
To be clear, Gurman isn’t claiming any insider knowledge on this – the phrasing makes it very clear he’s speculating. To be equally clear, I’m doing the same, but I do think Gurman could be right, for several reasons.
First and most obviously, Apple has protected its enviable margins fiercely over the years, and they have to be taking a hit right now. An early price correction to restore things seems entirely plausible.
Second, John Ternus officially becomes Apple CEO on September 1. Having one of his first announcements be price increases wouldn’t exactly get him off to the best of starts. Having the raise take effect from the launch of the new iPhones would also lend a sour note to the keynote.
Third, Apple has its Q3 earnings report next month. Given all of the work Cook has done to turn Apple into a multi-trillion dollar company, and in particular his role in enabling it to achieve its enviable margins, I can see that the company might not want to see him head toward his exit on a note of announcing reduced earnings.
If my reasoning is right, then this would indeed mean we can expect the price raises to take effect very soon indeed. If you were planning to buy any of Apple’s current models, rather than waiting for new ones, you might want to press the button sooner rather than later.
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