Last week there was a very unusual warning of Apple what the company will need increase prices of their products due to the current memory shortage.
Tim Cook declined to say anything about the scale of the increases or their timing, sparking speculation about both…
Price increases on Apple products
Tim Cook broke the news in an interview with The Wall Street Journal.
“Unfortunately, price increases are inevitable,” he said. “We are doing everything we can to mitigate the huge increases that are happening to us and have been trying to protect our customers from the increases, but the situation has become unsustainable.”
The company generally does not communicate price increases in this way, so there has been speculation that the increases could be significant.
Price hikes could be imminent
Some assumed Cook was setting us up for higher prices when the iPhone 18 Pro launches in September, and that wasn’t a wild assumption. That notice would give people enough time to get used to the idea and would make the price increase old news when it spread.
However, Bloomberg Mark Gurman think the opposite.
As for Apple’s price increases, you have to imagine they’re pretty imminent. There is no other reason to point them out now. I’d also like to point out that Apple’s back to school sale is very imminent and it might make sense to tie them together as a buffer. Either way, this will happen soon. It’s not a fall.
To be clear, Gurman doesn’t claim to have any inside knowledge about this; the wording makes it very clear that he is speculating. To be equally clear, I’m doing the same thing, but I think Gurman might be right, for several reasons.
First and most obviously, Apple has fiercely protected its enviable margins 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 CEO of Apple on September 1. Having one of your first announcements be price increases wouldn’t exactly get you off to the best start. That the increase comes into force from the launch of the new iPhone would also give a bitter note to the keynote.
Third, Apple will report its third quarter earnings report next month. Given all the work Cook has done to turn Apple into a multibillion-dollar company, and particularly his role in enabling it to achieve its enviable margins, I can see that the company may not want to see him head toward its exit under the guise of announcing reduced profits.
If my reasoning is correct, this would mean that we can expect the price increases to take effect very soon. If you were planning on purchasing any of Apple’s current models, rather than waiting for new ones, you might want to hit the button sooner rather than later.
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