John Ternus-led Apple has reportedly told some suppliers to cut production of components for its newly launched iPhone 18 Pro and iPhone 18 Pro Max, with soaring memory chip costs and price increases dampening consumer demand.
As per the Nikkei Asia, the iPhone maker has turned more conservative on shipments since September, with component orders for October being slashed by at least 15% compared with what was originally requested.
The cost increase has happened due to the tech companies scooping up advanced chip-making capacity and memory chips to power AI data centers, sparking shortages and price increases that are expected to shrink both the personal computer and smartphone markets in the coming months.
Apple raised iPad and MacBook prices in June, while expressing its inability to protect its customers from soaring memory and storage chip costs driven by the data center boom.
The entry-level MacBook Neo rose from USD 599 to USD 699, while the MacBook Air with 512GB storage climbed from USD 1,099 to USD 1,299. The MacBook Pro with 1TB storage jumped USD 300, from USD 1,699 to USD 1,999.
On the iPad side, the 128GB iPad Air rose from USD 599 to USD 749, and the 256GB Wi-Fi iPad Pro increased from USD 999 to USD 1,199. Apple also raised prices on its HomePod and Apple TV.
Apart from the data center demand, Apple’s push to pump more AI features into iPhones and other products has also resulted in the demand for high-performance memory amid the ongoing chip shortage.
Apple’s previous CEO Tim Cook, during a June interview with the Wall Street Journal (WSJ), described the price rises as “unavoidable” while calling the chip shortage as “a hundred-year flood,” unlike anything he had witnessed in more than 40 years in the industry.
As per the Nikkei, demand for Apple devices has been softer from late August into October. However, the media outlet attributed it partly to the tech giant changing its launch schedule for iPhone models.
Last month, Apple launched the iPhone 18 Pro and 18 Pro Max handsets, along with its foldable phone Duo.
The iPhone 18 Pro and Pro Max have starting prices at USD 1,199 and USD 1,299, respectively, up USD 100 from the starting prices of the iPhone 17 Pro and Pro Max.