Tim Cook Blames Micron for Apple's Price Hike

Apple's recent price increases across the MacBook, iPad, Apple TV, HomePod and Vision Pro lineups came down to one culprit, according to CEO Tim Cook: memory chip suppliers charging more than ever before. But the supplier at the center of that story tells a different version, one where big buyers helped create the shortage they're now paying for.

At a Glance

• Apple raised prices on several product lines on June 25, citing surging memory chip costs.
• Tim Cook called the price hikes from memory suppliers unavoidable and unsustainable.
• Micron executive Sumit Sadana suggested aggressive buyers pushed suppliers into damaging price cuts back in 2023.
• Micron's fiscal third quarter revenue jumped 345.7 percent to 41.46 billion dollars with an 84.6 percent gross margin.
• Micron shares rose about 15 percent after hours while Apple stock dropped more than 6 percent.

What Apple Said About the Price Hikes

Apple confirmed the increases on June 25 and pointed to conditions outside its control. Cook had already laid the groundwork a week earlier in comments to The Wall Street Journal, saying supply had tightened just as consumer demand for devices stayed strong. He described the situation bluntly: memory suppliers were passing along huge price increases, and there wasn't much Apple could do about it.

Apple went further in its public explanation, attributing the squeeze to a boom in AI data center construction. That buildout, the company said, had created an extraordinary surge in demand for memory and storage chips, the kind that go into everything from smartphones to server racks. Apple described the pace of the price increase as something it had never encountered before with any component.

Micron's Side of the Story

Hours before Apple made its announcement, Micron's chief business officer Sumit Sadana gave his own interview to The Wall Street Journal, and it read like a rebuttal in waiting. Sadana didn't name Apple directly, but he described a pattern that fits a company with Apple's negotiating muscle: large buyers using a market downturn to squeeze suppliers on price.

Sadana pointed back to 2023, when memory prices collapsed industry wide. He said some big customers used that slump to lock in extremely low prices, which gutted supplier margins right when those suppliers needed money to expand production capacity.