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I think Apple could easily swallow these price hikes in its profit margin if it wanted to, but then its shareholders wouldnt have as pretty numbers to look at i
by alt227 4mo ago
I think Apple could easily swallow these price hikes in its profit margin if it wanted to, but then its shareholders wouldnt have as pretty numbers to look at in their quarterly reports.
- krona 4mo agoHow do you know they're not also swallowing a portion of the supplier costs?
- whh 4mo agohttps://www.apple.com/newsroom/pdfs/fy2026-q1/FY26_Q1_Consolidated_Financial_Statements.pdf https://www.apple.com/newsroom/pdfs/fy2026-q1/FY26_Q1_Consol...
- qtk8 4mo agoWhy would Apple do that?
- matsemann 4mo agoBecause it could be strategically good to increase their market share and loyalty when everyone else is increasing their prices, for instance? But no, the "fiduciary duty" thing trumps everything, I guess.
- sokoloff 4mo agoApple is free to make either choice (or anywhere on the spectrum) without violating any duty they have to shareholders. “We chose to invest in future market share, believing that was in the best interest of the company” is a perfectly valid choice for the company leaders and board to make.
- alt227 4mo agoWe are only talking about opinion here. Obviously Apple shareholders have their own and thats what they use to direct the company, thats fine. My opinion would be more along the lines of 'Lets sacrifice 1% of profit this year to gain huge chunks of market share by undercutting literally everybody else in the industry for the first time in our history'.
- inlined 4mo agoBut Apple has always made their image quality not cost effectiveness. Pivoting here too drastically could sacrifice their image and backfire
- alt227 4mo agoFair enough. I had the same opinion when they released the neo. In 3-4 years time there are going to be absolutely loads of them looking shabby and tired and running very slowly. Apple has been so careful over the past 3 decades to avoid that image, I'm surprised they are happy to go down that road now.
- alt227 4mo agoThey could gain a shedload of market share by remaining cheap while pricing in the whole rest of the industry rockets up? Especially after just releasing the Neo, their cheapest laptop ever. They could be taking chunks out of the PC market right now if they werent so greedy.
- zikduruqe 4mo ago> They could gain a shedload of market share by... ... having end user replaceable DDR5 RAM and end user replaceable storage. Even if it is a low end underpowered laptop. Not everyone needs to render 8K videos in 5 minutes.
- alt227 4mo ago95% of the worlds population don't care about those things at all. That's why apple devices are so popular.
- qtk8 4mo agoI'm sure a lot of smart people have weighed all the options and decided that this one was the best.
- jameshart 4mo agoThis is the explanation for almost all things done by public companies. The shareholders own the company. The numbers in the quarterly reports are important to them.
- al_borland 4mo agoIt seems like they have been doing that for a while now. Most other companies raised prices a while ago. At some point that becomes unsustainable. All these AI companies need to stop hoarding RAM.
- alt227 4mo agoApple made $120 Billion in profit last year alone. They could easily keep swallowing this if they wanted to. But then they would only make $119 billion profit this year, and their reports would show negative growth. Cant have that now.
- al_borland 4mo agoOnly a private company can realistically do that.
- astrodust 4mo agoAmazon is right there, reinvesting profits.
- thewebguyd 4mo agoPublicly traded companies can as well. There is no legal ruling that states a company must maximize EPS or face lawsuits. Apple could justify eating the margin to retain customers, build brand loyalty, or whatever other reason they can come up and the courts give a ton of leeway to business judgements in Delaware if they were sued over it. Their fiduciary duty just means they have to act in the best interest of the company and its shareholders and not act for personal gain. Apple just has to spin eating the margin as being in the best interest of those parties. The real reason they don't isn't any duty to shareholders, its any sort of drop would wipe billions off their market cap and directly affect exec compensation.
- jameshart 4mo agoApple sells about 400 million units a year. If they ate an average $100 margin decrease on every one of those sales, that profit number wouldn’t go down from $120bn to $119bn, it would go down to $80bn. Now you can absolutely argue that $80bn is still an excessively large number, but just so we’re being realistic about what the difference we’re looking at here is, it’s not a tiny percentage of their profits, it’s a third.
- audunw 4mo agoThe scale of Apple is such that I suspect they also set prices based on what would lead to shortages. If they had significantly lower prices, to avoid annoying customers by not having things in stock, they’d basically have to fund the construction of new factories. They do do that kind of stuff, but it’s not trivial.