As memory prices soar, Apple starts a “price war”

# Bao Yilong

Source: Wallstreetcn

Apple is turning the memory chip price crisis into a strategic opportunity to expand market share. The iPhone 17e is priced at 4,499 yuan and the MacBook Neo at 4,599 yuan, maintaining a low-price strategy, while Android and PC brands are forced to raise prices amid soaring chip costs. IDC commented: "Apple is going on the offensive, viewing the memory crisis as a chance to seize market share. All other smartphones in the same price segment will face upward pricing pressure."

Apple is transforming a memory crisis sweeping the consumer electronics industry into a strategic opportunity to gain market share.

According to Wallstreetcn, Apple unveiled a series of new entry-level products this week. The iPhone 17e starts at 4,499 yuan, unchanged from its predecessor. The MacBook Neo laptop is priced at 4,599 yuan, lower than some analysts had previously expected.

Notably, costs for memory and storage chips used in these devices have continued to climb. As reported by Wallstreetcn, Samsung’s semiconductor division earlier doubled the price of LPDDR5X chips supplied to Apple for the iPhone 17 series.

Samsung’s semiconductor unit initially targeted a roughly 60% price increase for Apple, and opened negotiations with a 100% hike to leave room for bargaining. However, Apple accepted the offer immediately, locking in the doubled price.

The crisis will hit competitors far harder than Apple. Francisco Jeronimo, Vice President of Research at IDC, stated:

"Apple is going on the offensive, viewing the memory crisis as a chance to seize market share. All other smartphones in the same price segment will face upward pricing pressure."

He added that this will create an opening for consumers to switch from Android to iOS, and from Chromebooks and Windows PCs to Mac.

## Memory Crisis Hammers the Industry, with Android Hardest Hit

IDC projects that global smartphone shipments will slump 13% this year due to soaring memory chip costs and supply shortages — the steepest drop on record.

Driven by demand for AI servers, memory and storage chip prices have risen sharply. Memory affects device performance, while storage handles local saving of photos, videos and other files.

Low-end Android devices are bearing the brunt. IDC notes these products will face unprofitable conditions. PCs and Chromebooks are also under pressure, with the market forecast to shrink 11% in shipments this year.

Mid-range models from Chinese smartphone brands including Xiaomi, Oppo and Honor are expected to be forced to raise prices. Meanwhile, Apple’s low-price strategy has narrowed the gap, especially in markets such as China, Japan and the U.S., where Apple offers 24-month installment plans.

Furthermore, following the success of the iPhone 16e in Japan and the U.S., the iPhone 17e has strong growth potential in those markets.

Even so, Apple admits it is not entirely immune. Apple CEO Tim Cook said during the company’s recent earnings call that Apple has "seen a significant increase in market prices for memory" and expects a more noticeable impact on profits starting this quarter.

## Apple’s Dual-Track Strategy: Low-Cost Entry Models, Premium Flagships

Apple’s pricing structure reveals a clear offensive-defensive logic.

As Wallstreetcn noted, Apple’s current strategy is to boost profits through flagship products to offset margin pressure from entry-level devices. Notably, Apple this week launched both the MacBook Pro with the M5 Max chip and the affordable MacBook Neo.

This shows Apple aims to expand its product lineup in both directions: retaining high-end buyers while attracting first-time Mac users, switchers from Windows and Chromebooks, and iPhone users who do not yet own a Mac.

Analysts suggest a similar strategy could extend to the smartphone lineup, with some iPhone 18 models expected to launch at higher prices this autumn.

Bernstein Research estimates that the manufacturing cost of the iPhone 18 Pro Max will jump 25% due to higher costs for memory, storage and processor chips.

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