Will Tim Cook’s Parting Gift Be an iPhone Price Increase?
James A. Molnar
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Last week, we reported that Apple will finally have to surrender to the pressure of rising SSD and memory costs and finally raise prices.
Tim Cook delivered the sad news during an exclusive interview with The Wall Street Journal’s Rolfe Winkler.
“Unfortunately, price increases are unavoidable,” he said. “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.”
While Cook declined to offer any additional information, such as how large the increases might be, or when price increases might take effect, the very fact that Apple is warning its customers at all indicates the increases could be significant — and that they’ll kick in sooner rather than later.
Winkler indicated that price increases would likely come to the Mac and iPad first. Still, many observers believe that Cook is laying the groundwork for increased prices on the iPhone 18 Pro when it launches in September. A notice of the price hike a few months ahead of the actual increase would give customers a chance to absorb the idea of an iPhone price hike, making any such hike more acceptable or at least less horrifying by the time it actually rolls around. However, Bloomberg’s Mark Gurman believes this isn’t “a fall thing” and price hikes will come even sooner.
It should be noted that Gurman doesn’t claim to be the bearer of any inside information. The way he frames his statement indicates that he, like everyone else, is just speculating as to the timing of the increase. So far, any discussion about Apple price increases remains completely speculative. However, as 9to5Mac‘s Ben Lovejoy points out, there are a few good reasons why price hikes are coming — and coming soon.
As Lovejoy notes, Apple’s legendary price margins have to be dramatically shrinking. As Cook said, Apple has been eating into those margins to avoid passing the costs on to consumers, but that’s no longer possible. Increasing prices on the iPhone and other products could give them a jumpstart on restoring those margins back more comfortable levels for Apple and its investors.
It’s also worth keeping in mind that Apple’s new CEO, John Ternus, officially takes the helm on September 1. It’s much easier for Cook to be the bearer of bad news here and shoulder at least some of the blame if Ternus ends up announcing price increases for this fall’s iPhone 18 Pro lineup.
Last but not least, Apple reports its fiscal Q3 earnings in July. That will be the final earnings report under outgoing CEO Tim Cook. As noted by Mactrast, it won’t be an ideal look if a CEO who has built up Apple’s enviable product margins over the years ends his tenure following news of reduced earnings. Still, with Q3 ending on June 30, there’s no time to change those numbers in any meaningful way. At most, this would be about Cook showing Apple has a plan to return to greater profitability as he prepares to move into the executive chairman’s office.
As I said, this is all speculation for now. We won’t know when the price increases will hit, or by how much, until an official announcement is made by Apple. I’m just saying if you’re planning on buying an iPhone 17 Pro or any other current Apple product, that’s a purchase you should be making “tout suite.”
[The information provided in this article has NOT been confirmed by Apple and may be speculation. Provided details may not be factual. Take all rumors, tech or otherwise, with a grain of salt.]
