Apple has raised prices on Mac, iPad and accessories by 15% to 25% in what Morgan Stanley calls an unprecedented effort to defend gross margins amid record memory cost inflation. Analyst Erik Woodring said the scale of the increases suggests Apple is defending gross margins, not just offsetting cost inflation, particularly from memory. The bank could not find comparable price hikes of this magnitude going back 15 years, outside of isolated model-level changes. Morgan Stanley believes demand elasticity is the key debate, but noted that history suggests Apple's ecosystem supports relatively resilient pricing power and some level of demand inelasticity, pointing to a $200 to $300 price increase netting out to just $4 to $6 per month over a four-year replacement cycle. An Apple spokesperson said the company has shielded customers from these increases so far, but has now reached a point where it needs to begin raising prices on a number of products.
Apple Inc.Apple raises Mac, iPad, and accessories prices 15-25% to defend margins, which directly boosts revenue per unit.
Morgan Stanley