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Apple boss Tim Cook says prices to rise due to memory chip costs

bbc.com

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Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#101

Post by [deleted] »

alt227 wrote: post #80
anon373839 wrote: post #33

Earlier quoted context omitted.

> Aren’t prices sky rocketing precisely because of excess demand? Not exactly. The RAM crisis was sparked by OpenAI contracting with multiple vendors to take vast quantities of raw, unfinished wafers off the market. Wafers which OpenAI had no use for -- they just wanted to starve competitors. This is different from an "AI is so popular that manufacturers can't keep up with demand" story. OpenAI and Anthropic are the…

I think you are splitting hairs. Both arguments boil down to 'AI companies are taking all the chips'. It doesnt really matter why, the result and reasons are the same.

[deleted]

Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#102

Post by IshKebab »

AnthonyMouse wrote: post #91
IshKebab wrote: post #90

Earlier quoted context omitted.

For a start, most of the world does not use text messages. They use WhatsApp. (Apart from a few countries where WeChat, Telegram or Line are more popular.) As far as I know the US is the only country that still uses SMS/RCS.

So write a WhatsApp client for your phone and convince the EU to make them interoperate with you.

Unfortunately that EU WhatsApp interoperation thing isn't really what we wanted. I assumed it would mean that you would be able to communicate with WhatsApp contacts using a non-WhatsApp app (kind of like Pidgin back in the day).

Meta obviously don't want that and they've done a sneaky thing to make it useless: if you connect a third party app to WhatsApp, from that third party app you can only chat with other WhatsApp contacts that have also connected the same third party app to WhatsApp. So if you write your own WhatsApp client that runs on this low power phone it will be completely useless because to chat with your friends they would all have to manually connect their WhatsApps to your client, which of course they won't do.

See https://developers.facebook.com/m/messaging-interoperability... - check the `WhatsApp Messaging Interoperability User Experience - Android`

I guess we'll see if the EU lets this stand but my guess is they will.

Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#103

Post by type0 »

AnthonyMouse wrote: post #47
cm2187 wrote: post #22

There was a very interesting podcast that went into all the details of the AI supply chain shortage [1] The key takeaway for smartphones isn't so much that iphones will cost $150-200 more, which apple customers have shown they can stomach. But that cheap $200 chinese smartphones will need have to hike prices by about the same amount, which will decimate that market. [1] https://www.youtube.com/watch?v=mDG_Hx3BSUE

Or they'll start making cheap phones with <=2GB of RAM again and people will have to write software that uses memory efficiently (the horror).

> nd people will have to write software that uses memory efficiently (the horror).

Not possible since we all "need" AI in our phones

Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#104

Post by lostlogin »

frollogaston wrote: post #44
lostlogin wrote: post #40

Earlier quoted context omitted.

Is that it, or did Apple negotiate long term contracts with suppliers? Tim Apple has never been one to shy away from squeezing out another dollar.

It could be that too. But just seeing Apple not raise prices on the face of it, that could be purely from taking lower margins. I'd have to dig into the last earnings call.

Apple hasn't had many models constrained by supply instil recently (Neo, Mini and possibly studio). The ram shortage doesn't seem have have hit them until quite recently. Existing agreements? They pay more to be prioritised?

Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#105

Post by ErneX »

prmoustache wrote: post #34
noobermin wrote: post #3

Tbf, this current era of capitalism really is a lot where absolutely no one wants to enter the market and take advantage of a clear overpricing of memory for consumers but simply wants to charge the same amount as everyone else. So much for "efficient markets."

You don't want to build a huge factory if you believe the market might deflate suddently. A lot of industries got bitten by greed and the sudden deflation of demand and huge unsold inventory post COVID. The reality is the market was overly and abnormaly inflated and consumers who bought the stuff during COVID period were equipped for the next ~10 years in stuff like sporting goods and had no reason to buy new items i…

Exactly, and this isn’t the 1st time this happens. Some companies disappeared years ago due to overcapacity when prices went down.

Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#106

Post by johnvanommen »

AnonC wrote: post #71

I read somewhere (don’t recall where) that Apple typically enters into contracts for RAM on a six-monthly basis and avoids longer term ones. Even in the current situation since last year, it has avoided getting into multi-year contracts like the AI companies have. It’s certainly possible that the AI companies and their prospects may get a true reality check and then memory prices could cool down in a year or two. If…

> I read somewhere (don’t recall where) that Apple typically enters into contracts for RAM on a six-monthly basis and avoids longer term ones. Even in the current situation since last year, it has avoided getting into multi-year contracts like the AI companies have.

* when interest rates are declining, that’s a feature not a defect

* when interest rates are rising, that’s a defect not a feature

Southwest Airlines built its business on these kinds of bets.

Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#107

Post by johnvanommen »

dzhiurgis wrote: post #81
djsjajah wrote: post #72

Earlier quoted context omitted.

Except, that won’t help. By the time a new fab is up and running, we will probably have a massive surplus.

You assume demand for AI stays flat.

> You assume demand for AI stays flat.

RAM has become an asset class, like real estate, or orange juice, or cattle, or collectible cars.

It’s wild to see.

I don’t know if there is an options market or a futures market for RAM.

But it seems inevitable.

Imagine the United States hoarding RAM the way that nations of old hoarded gold.

Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#109

Post by johnvanommen »

prmoustache wrote: post #34
noobermin wrote: post #3

Tbf, this current era of capitalism really is a lot where absolutely no one wants to enter the market and take advantage of a clear overpricing of memory for consumers but simply wants to charge the same amount as everyone else. So much for "efficient markets."

You don't want to build a huge factory if you believe the market might deflate suddently. A lot of industries got bitten by greed and the sudden deflation of demand and huge unsold inventory post COVID. The reality is the market was overly and abnormaly inflated and consumers who bought the stuff during COVID period were equipped for the next ~10 years in stuff like sporting goods and had no reason to buy new items i…

> A lot of industries got bitten by greed and the sudden deflation of demand and huge unsold inventory post COVID.

I’m betting that the world is about to hit a wall of inflation.

https://i.ibb.co/s9Mm8w2r/IMG-0743.jpg

This is a graph I made.

It shows:

* the inflation rate from 1971 until 1991

* the inflation rate from the start of COVID 19 until today.

Does anyone notice anything interesting about the graph?

Re: Apple boss Tim Cook says prices to rise due to memory chip costs

#110

Post by jbs789 »

noobermin wrote: post #3

Tbf, this current era of capitalism really is a lot where absolutely no one wants to enter the market and take advantage of a clear overpricing of memory for consumers but simply wants to charge the same amount as everyone else. So much for "efficient markets."

Umm… a simpler explanation is that supply takes a lot longer to ramp up than demand.

See analogues in oil booms (then busts).

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