[throwaway63467]

Isn’t Apple potentially under a lot of pressure due to the DRAM prices as well as having to compete with AI for fab capacity? Before all the price hikes their products were already priced at the top of the market so I would assume that memory getting more expensive will impact their sales or margin quite a bit as they can’t subsidize hardware like AI companies do (they can of course eat into their own margins a bit which I think they already do). So not sure if what happens right now is great for them, if the memory market collapses it will of course be good.

[alpha_squared]

> Isn’t Apple potentially under a lot of pressure due to the DRAM prices as well as having to compete with AI for fab capacity?

I'd qualify this with for now. It's not entirely clear what happens in the event the AI industry implodes, but I do think there will be a glut of memory and hardware up for grabs. It very well could crash the consumer hardware market as a result. The AI obsession and investment has burrowed so deeply across the US economy that I can't think of a single industry that won't be impacted, including agriculture.

[thewebguyd]

> It very well could crash the consumer hardware market as a result

Tbh, I hope it does. Prices are outrageous, and I'm a firm believer in personal computing/having access to powerful hardware, privately and locally, is hugely important.

On a more selfish note, I miss the days of being able to build an outrageously powerful desktop for myself for relatively cheap. For now I'm still holding onto my AM4 motherboard w/ 64GB DDR4 and an aging GPU, praying my 7 y/o GPU holds up long enough for prices to drop again.

[bpavuk]

64 GB! you are lucky :) sitting there with 16GB, a GPU that already shows the signs of strain, and AM4 Ryzen 5 5600G. (MacBook Air M1 equivalent in single-threaded tasks.) apparently the CPU requirements slowly crept up across the line. and then there is looming AVX512. why "looming"? because at some point enough people will move to it that software will require AVX512.

[rbanffy]

Maybe a year from now we'll all be using MI300As and EPYC 9600s to read e-mails. Or Nvidia Veras, maybe AWS will sell some of their Graviton stuff in an effort to offset their capex.

Unfortunately, I don't think IBM Cloud will suffer enough for me to play Tux Racer on my very own Z17.

[sillywalk]

> play Tux Racer on my very own Z17

Interesting. It looks like Debian has a Tux Racer package for Extreme Tux Racer on s390x. I guess it'd be remote graphics, and not accelerated.

[rbanffy]

I don’t think Linux on Z supports GPUs on the PCIe IO drawers, but that’s a relatively minor software enablement issue. All I need is a z17 for myself to play with it ;-)

[bpavuk]

actually I'm looking forward to that :3 but that requires Claude et al. going bust and HN is gonna kill me if I wish that publicly

[rbanffy]

I would also be very sad to lose one of my best coworkers. Everybody in the office treats Claude as their own assistant. Just today Claude reminded me I forgot to add a database zone migration to my fault-injection experiment. Not only he reminded me, he also implemented it with perfect consistency with project guidelines.

[HumblyTossed]

> It very well could crash the consumer hardware market as a result

I really hope it doesn't but I could see this resulting in just a couple "PC" manufacturers remaining when this is all over. Things will never be the same after that, and likely much worse with a couple companies telling us what we can and can't do on our devices.

[bpavuk]

> including agriculture

in fact, agri sees its share of impact now! all of this investment has to come from somewhere, which means that money is getting sucked up into AI from the entire economy. job cuts in tech are part that, part general "de-bloating" of post-COVID tech. retail investors are a lot more likely to invest into AI than any other industry, although there are signs that big players already consider risks of overexposure to AI.

not to mention, agri saw a "bubble" of its own, surrounding Agtech, which peaked at 2021 and has been cooling ever since. scare quotes here because it was nothing like AI bubble

[Someone]

> Isn’t Apple potentially under a lot of pressure due to the DRAM prices

Maybe. On the one hand, if there is a strong ceiling to what users are willing/able to pay for a smartphone (might not be true, with all those people making $$ on the stock market), they will have to cut prices.

On the other hand, if one part gets more expensive, premium phones need smaller relative price increases than budget phones. Certainly, if they are willing to accept lower margins, premium product might get more attractive.

Also, iPhones tend to have less RAM than competitors, so this might hit other premium manufacturers harder than Apple.

[ProfessorLayton]

Apparently RAM and SSD costs have risen so much recently that the bill of materials on the next iPhone could exceed the entire cost of the current one just on RAM/SSD alone [1]

[1] https://images.macrumors.com/t/PtKleXF2po_g3qSuA6VMOE90WEM=/...

[sillywalk]

Interesting. If it's accurate, Apple sure has a nice markup.

Side note: I wished they'd chosen more distinctive colours for the charts.

[randysalami]

Holy hell that’s a crazy image. Can’t even fathom how they will go forward.

[cmiles8]

Yes it does impact all hardware makers and they raised prices as a result. But again remember the financial reality here… DRAM is in short supply because of the demand for models propped up by VC subsidies and infrastructure providers going deeply into debt to buy all this stuff just as folks are realizing we’re on track to over build capacity. So yes Apple gets impacted a bit in the short term but in the long term they’ll gleefully watch it all burn.

[CoolestBeans]

Sure, but DRAM is a commodity and is classically cyclical. This is a particularly large cycle but so long as the historic pattern holds (and there's not a ton of reason to think it won't unless the hyperscalars can go into greater debt indefinitely which given inflation and interest rates they can't) Apple just needs to get through this peak in prices, which they have a LOT of ammunition to do so.

Having to raise prices isn't a great look but when they come out the other side they can drop pirces and get a boost in volume or they can keep them high and enjoy a bigger profit margin.

[doom2]

> Having to raise prices isn't a great look but when they come out the other side they can drop pirces

The fun part is that they can drop prices but they'll still be higher than before the initial price increase, thereby increasing volume _and_ getting some extra profit. Consumers still lose.

[dubcanada]

Let's be real here, Apple does not have to compete with AI for fab capacity, they can outbid anyone if they want. They have more money and longer contracts then anyone else. Apple customers will just end up paying for said DRAM price inflation.

The ones who will actually suffer is Apple 2.0 (presumably a different competing company), start ups, research, companies that are not worth trillions.

[InsideOutSanta]

Apple already had giant margins before and could easily absorb memory price increases. The fact that they did not and instead decided to increase prices shows how confident they are that people will buy their hardware anyway.

[wpm]

They did absorb them, this price madness began a year ago and they only increased prices last month.

[philistine]

Apple has long term contracts for every part that goes in the most complex supply chain on the planet. Do you think they call their suppliers every morning asking for 2 million chips?

Their price increases were a mixture of absorbing some of the increase and passing what they won't on us.

[wpm]

So...we agree.

[quickthrowman]

Everyone is paying more for RAM these days, I expect Apple to maintain their margins.

[blks]

They are, for now; but also Apple is known for making long term price locked contracts and ensuring availability of semiconductors for their devices.

[telesilla]

Couldn't Apple afford to make it's own RAM fab etc at this point and have a dedicated pipeline of parts for its own products?

[SllX]

RAM production is historically not a great business to be in. It’s a mint today, but it’s an incredibly tough business to break into & by the time any hypothetical Apple RAM fab is up & running, it will already be losing money.

To give you some idea, here’s an Asianometry video describing Taiwan’s prior DRAM attempts: https://youtu.be/ehT3U935Pww