Apple price increases blamed on storage? Micron executive counters: The blame lies with previous low-price purchases, which caused storage manufacturers to stop expanding production.

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Apple and Micron are engaged in a public crossfire over responsibility for the pricing of storage chips.

WallstreetCN mentioned that Apple announced on Thursday a global price increase for Mac, iPad, and multiple hardware products, with hikes as high as $300, marking the company’s largest worldwide price adjustment in recent years.

Previously, Apple CEO Tim Cook told the media that tight memory supply and substantial price hikes by storage manufacturers are forcing Apple to raise product prices.

However, as one of Apple's suppliers, Micron Technology’s Chief Business Officer Sumit Sadana responded, suggesting that Apple’s previous aggressive pricing strategies were one of the key causes of the current storage supply shortages.

This war of words comes as Micron delivered an impressive quarterly report. Micron Technology's fiscal Q3 revenue soared 346% year-on-year, gross margin approached 85%, and Q4 revenue guidance exceeded market expectations, jumping nearly 16% the next day.

Cook Claims Innocence: Storage Makers’ Price Hikes Are Fierce, Consumers Under Pressure

Cook directly pointed at storage manufacturers in an interview with The Wall Street Journal. He said:

As consumer demand for devices remains strong, supply is decreasing, and storage makers are passing on substantial price increases. We do need memory prices and supplies to return to reasonable levels—that’s the key.

This statement positioned Apple as a passive bearer of the price hike wave, sending a signal to the public: this round of product price increases aimed at consumers stems from cost pressures in the upstream supply chain, not from Apple’s own actions.

In response, Sadana gave a completely different narrative in an interview with The Wall Street Journal after Micron’s earnings release. He did not name names, but was direct:

We once told several customers whose price requests were extremely aggressive at the time that this approach was not constructive.

He further pointed out:

Many industry-wide investments in 2023 were halted due to extremely low pricing and terrible profit margins.

Apple is known for tough negotiations with suppliers, and its long-term procurement agreements are often cited in the industry. Such agreements give Apple more buffer during cycles of rising memory prices, letting it delay passing on cost increases compared to competitors.

However, Sadana's remarks reveal the other side of the coin. During the last downturn in the storage market, Micron’s gross margin turned negative, and some customers seized the opportunity to push purchase prices to the bottom.

While locking in extremely low prices protected buyers’ short-term interests, it simultaneously suppressed the profitability of storage manufacturers, making them unable to invest in new capacity and laying the groundwork for future supply shortages.

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