RAM shortage challenges Apple with market-wide issues

Apple has just announced its most affordable MacBook ever, but don’t expect a wave of budget-friendly products soon. The company is grappling with the same high memory prices as everyone else, driven by the booming demand for AI servers and chips.

Apple’s efficient architecture makes its devices suitable for phones, tablets, and laptops with limited RAM, but this advantage has limits. Even that limited memory is becoming more expensive, squeezing margins.

Apple is facing memory costs that will increasingly impact its business beyond the next quarter.

During its investor call after reporting record revenue for the quarter ending in March, Tim Cook explained that high memory prices were partly offset by existing inventory. However, going forward, memory costs are expected to rise and influence the company’s profitability.

What options will Apple explore? It’s hard to say for sure. Cook mentioned that the company is evaluating “a range of options” and that products like the Mac mini and Mac Studio will likely remain in short supply for a few more months. The specifics of these options remain a mystery.

Will Apple raise prices on entire products or just on RAM upgrades? Will it ship devices with less memory to keep prices steady? Could some models stay scarce, affecting overall sales? Or will Apple focus on boosting services and new revenue streams like Maps ads to offset hardware margins?

The answers are uncertain. Apple excels at managing supply, pricing, and maintaining high profit margins. This quarter, it achieved a gross margin of 49.3%, despite tariffs. For the next quarter, margins are expected to stay around 48%, even with chip supply challenges.

However, Apple does not provide guidance beyond the upcoming quarter, when inventory runs out and memory prices continue to climb. Managing this chip crisis will be a key test for John Ternus, who takes over as CEO in September, inheriting a complex scenario for the company.