As memory prices skyrocket, Apple reveals its "fangs"! Is a long-planned price war about to begin?

The surge in memory prices has dealt a heavy blow to the global electronics market this year. However, as an industry leader, Apple has timely revealed its low-price “fangs”—many industry insiders say that Apple’s adjustment of pricing strategies for new devices indicates it is attempting to turn the survival crisis faced by competitors into its own market advantage through highly aggressive pricing.

On Monday, Apple released the new entry-level iPhone 17e, with a starting price of 4,499 yuan. Although this is the same as last year’s model, with the base storage upgraded from 128GB to 256GB, Apple has clearly adopted a “more for the same price” approach.

By Wednesday, Apple further announced on its official website a MacBook Neo with a starting price of only 4,599 yuan RMB, marking its most significant attempt to enter the low-end laptop market, directly targeting competitors like Microsoft and Google.

Industry experts point out that, despite the ongoing rise in memory costs potentially eroding Apple’s profits, Apple is now firmly executing a low-price strategy.

This may be because rising costs could be more painful for Apple’s competitors—smartphone manufacturers that sell mid-range devices might be forced to raise prices collectively. Consumers who previously avoided high-priced Apple devices due to cost and opted for cheaper alternatives will now have better reasons to switch to Apple…

Apple reveals its “low-price fangs”

IDC Vice President Francisco Jeronimo noted, “Apple is shifting into an offensive stance, viewing the storage crisis as an opportunity to gain market share—other smartphones in the same price range will face upward price pressure.”

He added that, this creates an opportunity for consumers to switch from Android to iOS, and from Chromebooks and PCs to Macs.

In the Chinese market, Apple may target mid-range Android models from Xiaomi, OPPO, and Honor by launching the low-cost iPhone 17e. As these models’ prices increase, the gap with the iPhone 17e will narrow—especially when consumers opt for Apple’s 24-month installment plan available in China.

Additionally, following the success of the iPhone 16e in Japan and the US markets, the iPhone 17e is expected to be equally popular in these regions. Given that the base storage of the iPhone 17e has doubled compared to last year’s model, this is inherently an added value for consumers.

IDC predicts that, due to soaring memory costs and shortages, the global smartphone market will experience its largest decline ever this year, with shipments dropping by 13%. The prices of DRAM and NAND chips are both rising sharply, driven by the surge in demand from AI servers for these components. DRAM accelerates application performance, mainly using LPDDR chips, while NAND flash memory stores photos, videos, and other files on devices.

IDC states that the most severely impacted will be low-cost Android devices, whose profit margins will vanish entirely. PCs and Chromebooks are also under cost pressure, with the organization forecasting an 11% decline in shipments this year.

Apple’s high-end product prices may also increase

Of course, Apple executives have previously admitted that the company itself cannot escape the impact of rising memory costs. Apple CEO Tim Cook said during last month’s earnings call that the company has observed “significant increases in memory market prices,” and that profits will be more noticeably affected starting this quarter.

However, Apple’s different pricing strategies for high-end and low-end products may help offset profit losses.

It is reported that to counteract the profit impact of low-cost entry-level devices, Apple may follow the example of the new MacBook Pro and MacBook Air announced on Tuesday by raising the prices of high-end products. Analysts point out that if similar strategies are adopted across all smartphone lines, some models of the upcoming iPhone 18 series this fall could see higher prices.

Bernstein Research estimates that the manufacturing cost of the iPhone 18 Pro Max model to be released this fall will surge by 25%, mainly due to increases in memory, storage, and processor chip costs.

In a report to clients this week, Bernstein analyst Mark Newman wrote, “Given the unprecedented shortage of memory supply, Apple has a unique opportunity—to capture market share from low-end Android smartphone manufacturers that cannot ensure sufficient memory supply.”