Apple is scrambling to shield consumers from a global memory crisis that's threatening to push iPhone 18 prices higher. Supply chain analyst Ming-Chi Kuo reports the company plans to absorb rising RAM costs rather than pass them to buyers, marking a strategic shift as component shortages ripple through the tech industry. The move comes as Apple switches to quarterly pricing negotiations with suppliers - double the usual frequency - while betting its lucrative services business can offset the margin squeeze.
Apple just made a risky bet on its ability to weather the worst memory shortage in years. The company plans to eat the cost of skyrocketing RAM prices rather than raise iPhone 18 sticker prices, according to supply chain analyst Ming-Chi Kuo, who's built a reputation for accurate Apple predictions based on supply chain intel.
The strategy represents a significant gamble. While Apple's kept quiet publicly, Kuo's sources reveal the company's now negotiating component prices every quarter instead of the standard six-month cycle. That's not a minor operational tweak - it signals Apple expects continued volatility and wants flexibility to respond fast. Another price hike is expected in the next negotiating round, Kuo warns.
But here's where Apple's business model gives it an edge competitors don't have. The company's betting it can offset tighter hardware margins through its services empire - the subscription revenue machine that includes Apple Music, iCloud storage, Apple TV Plus, and the App Store cut. That business generated over $85 billion in fiscal 2024 and keeps growing while hardware sales fluctuate. It's the cushion that lets Apple play the long game on pricing.
The memory shortage isn't happening in isolation. Nvidia, AMD, and Qualcomm are all competing for the same pool of components, with AI hardware manufacturing creating unprecedented demand. Glass cloth - a critical material for printed circuit boards used across the industry - is facing a serious bottleneck as AI companies snap up supply. When you're trying to build everything from iPhones to data center GPUs using the same base materials, someone's got to give.
