Apple has managed to achieve high profit margins with its absolute dominance over the supply chain for many years. However, today, with artificial intelligence-focused companies coming to the fore, the technology giant’s position in the supply chain hierarchy has begun to change.

The company is now forced to pay much higher payments for components that it had procured at very low costs in the past. This shows that Apple’s past market power has weakened and it has to face new economic realities.

Rising Memory Costs and Apple’s Strategy

In 2023 and 2024, Apple was paying approximately $17 for 8GB LPDDR5X RAM and $22 for a 256GB flash storage module. For these components, which cost a total of $39, the company was making a valuable profit by passing on $99 upgrade prices to consumers.

With the upcoming iPhone 18 Pro model, this cost structure changes completely. It is predicted that Apple will pay approximately $145 for 12GB DRAM and $51 for 256GB flash storage.

This new table means that the total memory cost increases to $ 196. This cost increase on the memory side reveals that Apple’s past high profit margin period is over.

This cost pressure experienced by the company is directly reflected in the price increases in products such as Mac, iPad and Vision Pro. To overcome this situation, Apple requests the US administration to lift restrictions on Chinese memory manufacturer CXMT.

Changing Balances in the Supply Chain

Apple’s attempt to get reinforcements from CXMT is seen as the company’s attempt to maintain its former power over the supply chain. However, experts state that it is unlikely that the US administration will respond positively to this request.

On the other hand, China’s prioritization of its own local artificial intelligence projects reduces the likelihood of Apple becoming the primary customer for suppliers in this region. For a long time, Apple was used to a system in which it bowed to all the wishes of its supply chain partners.

The fact that the company begins to be seen as a low-priority customer puts significant pressure on its corporate habits. In this new era, Apple needs to adapt to changing market dynamics and accept its increasing burden in the global technology world.

How do you think these fundamental changes in the supply chain will affect Apple’s future product pricing policies?