Apple Plans to Stabilize iPhone 18 Prices Amid RAM Shortage: Kuo

Apple is strategizing to maintain iPhone 18 prices amid a global RAM shortage, as reported by supply chain analyst Ming-Chi Kuo. Kuo indicates that the tech giant intends to minimize any potential price hikes for the new device.

Apple’s Cost Management Strategy

To counter the rising costs of RAM, Apple aims to absorb these additional expenses. The company is focused on keeping the initial price of the iPhone 18 steady.

Frequent Supplier Negotiations

Apple is changing its approach to negotiating with memory suppliers. Instead of the usual six-month intervals, the company will now engage in discussions every quarter. This adjustment reflects the urgency of stabilizing costs in a volatile market.

Potential Future Price Increases

Kuo anticipates that Apple will face further RAM price increases in its upcoming supplier negotiations. As RAM prices rise, the impact on the overall cost of manufacturing the iPhone could increase.

Diversifying Revenue Streams

To offset these rising costs, Apple is looking to bolster its services business. This division includes popular subscriptions like Apple Music, iCloud, and Apple TV. Thus, increased revenue from services may help balance out the financial impacts of component shortages.

Challenges Beyond RAM

Apple may not only struggle with RAM shortages. Other components, including glass cloth used in printed circuit boards, are also in short supply. Suppliers are prioritizing demands from the fast-growing AI sector, impacting availability for companies like Apple, Nvidia, AMD, and Qualcomm.

Conclusion

As Apple navigates the complexities of component shortages and rising costs, maintaining iPhone 18 prices will be challenging. Through strategic adjustments in supplier negotiations and bolstered service revenues, Apple aims to stabilize its pricing in a competitive market.