Apple to Raise Prices Due to Chip Shortage
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 11 hours ago
0mins
Source: CNBC
- Price Increase Expectations: Apple is expected to raise prices on its popular devices due to a global shortage of memory and storage chips, with estimates suggesting the new iPhone Pro could increase by $270, reflecting the company's struggle under cost pressures despite not disclosing specific products or price hikes.
- Market Reaction Mild: Despite the price hike news, Apple shares rose modestly on Thursday, nearing $300, indicating market confidence in Apple's strong product lineup and loyal customer base, suggesting minimal risk of demand destruction.
- Rising Cost Pressures: CEO Tim Cook noted that memory costs are expected to rise significantly in the coming quarters, particularly due to increased demand from data centers, which is limiting the production capacity for consumer electronics, thereby driving prices higher.
- Potential Strategic Adjustments: Apple may opt to raise prices only on higher-end models to mitigate the impact on entry-level products, thereby keeping the cost of entering its ecosystem relatively affordable and ensuring the sales potential of its high-margin services remains intact.
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Analyst Views on AAPL
Wall Street analysts forecast AAPL stock price to rise
27 Analyst Rating
17 Buy
9 Hold
1 Sell
Moderate Buy
Current: 295.950
Low
239.00
Averages
306.89
High
350.00
Current: 295.950
Low
239.00
Averages
306.89
High
350.00
About AAPL
Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. Its product categories include iPhone, Mac, iPad, Wearables, Home and Accessories. Its services include advertising, AppleCare, cloud services, digital content, and payment services. The Company operates various platforms, including the App Store, that allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts. It also offers digital content through subscription-based services, including Apple Arcade, Apple Fitness+, Apple Music, Apple News+, and Apple TV+. Its wearables include smartwatches, wireless headphones, and spatial computers. Its products include iPhone 16 Pro, iPhone 16, iPhone 15, iPhone 14, iPhone SE, MacBook Air, MacBook Pro, iMac, Mac mini, Mac Studio, Mac Pro, iPad Pro, iPad Air, AirPods, AirPods Pro, AirPods Max, Apple TV, Apple Vision Pro and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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