Apple Raises iPhone, MacBook Prices as Chipmakers Gain Power

Apple devices have become more expensive in India. Prices have gone up for everything from iPhones to MacBooks and iPads. The rising need for memory chips by intelligence companies is one main reason. A new report, from a well‑known publication suggests another possible cause. Chipmakers are gaining bargaining power after years of dealing with Apple’s strict pricing demands.

The report says that the increasing power of intelligence companies is affecting how Apple works with its suppliers. This is making it more difficult for the big technology company to get the prices it used to get.

AI boom pushes memory prices higher

The rapid expansion of AI infrastructure has triggered an unprecedented demand for flash memory, pushing prices sharply upward. According to a famous publication, citing data from research firm TechInsights, flash memory prices have increased roughly fivefold over the past year.

Memory that cost around 5 cents per gigabyte in 2023 now costs more than 30 cents, representing an increase of approximately 550 per cent.

The impact on Apple finances could be substantial. I am surprised by how much Apple plans to spend. The report estimates that Apple might spend twenty-five billion dollars on flash storage in 2026 compared with six billion dollars, in 2025 even though the amount of flash storage purchased is expected to remain roughly the same.

AI companies have also emerged as major buyers. Two years ago, Apple purchased nearly twice as much flash storage as Microsoft, Amazon, Meta and Google combined. Today, AI companies are collectively buying twice as much flash storage as Apple, giving suppliers more opportunities to secure lucrative contracts.

According to the report, Meta, Microsoft and Amazon have also signed long-term agreements with chipmaker Kioxia, agreeing to pay more to secure supplies.

Why chipmakers are gaining leverage

Apple has traditionally used Apples buying power to negotiate good prices and strict contract terms. Apple reportedly examined suppliers accounts to make sure other customers were not getting deals. When chip prices declined, Apple sometimes refused deliveries, leaving suppliers with unsold inventory.

However, the AI boom has changed the balance of power. With more companies competing for limited supplies, chipmakers have greater leverage in negotiations, potentially forcing Apple to accept higher costs.

Apple has also generated considerable profits from storage upgrades. The WSJ analysis estimates that the company earned more than 80 cents in gross profit for every dollar charged for additional storage on iPhones and iPads through 2025. IDC estimates suggest around 100 million iPhone buyers paid for storage upgrades last year, generating more than $10 billion in gross profit.

These figures are estimates based on industry data and the publication's analysis, rather than financial figures disclosed by Apple. The company says it values its long-standing supplier partnerships and looks forward to continuing to work with them.

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The higher costs and changing market conditions come amid substantial price increases across Apple's product range in India.

The iPhone 18 Pro now starts at Rs 1,64,900, while the iPhone 18 Pro Max costs Rs 1,79,900. Both are Rs 30,000 more expensive than their respective predecessors' launch prices.

MacBooks and iPads have seen similar increases. The 13-inch MacBook Air now costs Rs 1,49,900, while the 14-inch MacBook Pro with 1TB storage has climbed to Rs 2,39,900.

Among iPads, the 11‑inch iPad Air, with 128GB storage now costs Rs 89,900. The base 13‑inch iPad Air has reached Rs 1,19,900 while the 256GB 11‑inch iPad Pro is priced at Rs 1,39,900.

AI companies keep fighting for memory supplies. Apple may struggle to keep its usual price plan. Consumers may have to pay more for premium devices in the coming months.

ABOUT THE AUTHOR

Kahekashan

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Kahekashan is a passionate technophile with a keen eye for cutting-edge gadgets, emerging technologies, and everything in the digital realm. Raised in a Defence family with strong values and a background in literature, she has consistently pursued excellence in every endeavour. Her last full-time assignment involved content writing with the Indian School of Business.

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