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Projected Growth in iPhone Component Costs (RAM)
Comparison of RAM memory costs as a percentage of total iPhone material costs between historical data and future projections.
Primary Sources
John Ternus faces critical decisions on iPhone pricing and US ...
Incoming Apple CEO John Ternus is going to be facing two critical decisions soon after he takes the helm, says a new Financial Times report. First, how to respond to a massive increase in memory prices, with Apple’s RAM costs increasing by more than 400% by next year. Second, how to shape the company’s manufacturing plans across China, India, and the US … Memory costs to rise more than 400% Apple is facing an entirely new world when it comes to buying memory for its devices. The company is used to being such a dominant player in the market that it can essentially dictate terms to suppliers. With memory in massive demand for AI servers, that’s no longer the case. The Financial Times says that memory has until recently represented around 10% of the materials cost of an iPhone and that this will increase to as much as 45% by next year. That will leave Ternus facing an uncomfortable decision: does Apple absorb that huge increase in cost, accepting a corresponding reduction in its margins? Or does the company increase prices at the risk of reducing sales? This is likely to be a key question asked by analysts in tomorrow’s earnings call. Manufacturing across China, India, and the US Another key question will be how the company reshapes its manufacturing profile across China, India, and the US. One of Tim Cook’s diplomatic victories was staying on the right side of Trump, persuading him that manufacturing iPhones in the US was not a realistic prospect, while at the same time giving the president PR victories in the form of other investments in US manufacturing. Apple has also at times walked a very difficult tightrope in China, with the government there responding aggressively to the increasing shift of iPhone assembly from China to India. A report back in February said that China was deliberately hampering iPhone production in India in three different ways. The report says Ternus will have to make supply-chain decisions that will impact the company for many years ahead. These pressures come as Apple reconsiders where it builds its products, how it secures components and when it launches new devices — decisions that will reshape its business in the years ahead. “US investment will be one of the critical drivers of Apple’s strategy over the coming years,” said Samik Chatterjee at JPMorgan. “For John Ternus, the question is: how do I position the company to be on the right side of both Washington and Beijing?” 9to5Mac’s Take Tim Cook appears to have v...
5 biggest takeaways from my interview with incoming Apple CEO John Ternus
When you buy through links on our articles, Future and its syndication partners may earn a commission.Credit: AppleI didn’t know it at the time, but the person I was interviewing was about to ascend to the highest position in all of tech. I was speaking to John Ternus, who is currently senior vice president of hardware engineering and soon-to-be Apple CEO, for an interview on Apple’s 50th anniversary and what’s next for the company. And what struck me most — just as when I interviewed Ternus about the iPhone Air — is how down to earth and even-keeled he is.Of course, this was before Ternus was announced as the successor to Tim Cook for Sept. 1, at which point he’ll be taking over the reins for a $4 trillion business. But I don’t expect his demeanor or approach to change much as Ternus preps for this high-stakes role. During my conversation with Ternus, he was polished and quite thoughtful in his responses, and not too dissimilar from the man he’s replacing.But there’s also that spark of excitement that you’d expect from a true hardware nerd about what Apple has built and especially what’s in the pipeline.Ternus, 51, has worked with Apple for over 25 years. And during that time he has overseen hardware engineering for the iPad and original AirPods, as well as for new generations of the Mac, Apple Watch and iPhone. Ternus also played a pivotal role in the transition from Intel chips to Apple Silicon and was a central figure in the development of the Vision Pro.Here are the five quotes that stood out to me during my interview with Ternus.'We never think about shipping technology. We always think about 'how can we leverage technology to ship amazing products'This answer was in response to my question about Apple’s thinking around AI and Apple Intelligence. And it’s clear that Ternus is not interested in the current arms race around AI models. He’s more interested in the experiences they create with the devices are available now and what’s on the horizon.“AI is already happening in different places, like live translation on AirPods,” Turns said. “We’re taking the technology and leveraging it into really meaningful experiences, and that's how we think about approaching it.”'The Neo required something completely new from the ground up'Credit: AppleThis quote surprised me somewhat because the MacBook Neo seems like a stripped down MacBook Air on the surface. But it truly is a new device. It’s the first time Apple has put an A18 chip inside a laptop, and there’s ot...
What happens to iPhone when John Ternus becomes Apple's new CEO?
Ternus (left) and Cook (right). From September 1, John Ternus takes the reins, and will start to make his mark on how Apple creates, functions, operates, and presents itself. But what does his leadership mean for Apple's most important product? A product-first Apple Steve Jobs was a tech visionary with a razor-sharp focus on the end user.
Apple under Ternus: what comes next for the tech giant's hardware ...
John Ternus, Apple's incoming CEO, is a hardware guy, signaling Apple may be putting devices back at the center of its strategy.
