Over the course of the call (for ease of reference, I’m working from Jason Snell’s transcript over on Six Colors), Apple CFO Kevan Parekh used the phrase “higher memory costs” four times and “memory impact” twice; he also, as a bonus, said, “We expect the memory costs to continue to be a challenge for us.” New CEO John Ternus, meanwhile, spoke about the topic at some length, describing current memory pricing as “unprecedented,” then predicting “even higher memory costs, partly offset by a few factors” in the December quarter followed by still more increases in the quarters beyond.
Given those predictions, and Apple’s citation of higher memory costs as the reason for the original price hikes, it seems logical to expect Apple products to continue to get more expensive in the short to medium term. But the company was reluctant to admit this in so many words.
Wamsi Mohan, a representative of Bank of America, posed a question about this at the earnings call: “Is Apple changing anything in the way that you are procuring memory?” he asked. “How do you think about the progression of memory over time? And if it continues to be a headwind, is pricing also going to remain dynamic [and] potentially move higher?”
This, I’m afraid, is a classic journalistic mistake: the multi-part question which allows the respondent to answer only the parts they like. And cynical readers will be unsurprised to hear that Apple COO Sabih Khan chose to focus on the altogether less awkward first two parts and ignore the third. He talked about supplier relationships and purchase obligations and left it at that.
But that wasn’t the end of the matter. Perhaps Kevan Parekh figured that, if that was all the answer he received, Mohan would use his follow-up to drill down into the pricing issue some more and it would look like Apple had dodged the question. So he addressed it… after a fashion.
“Wamsi, maybe I’ll add here because you asked the question about pricing and how we’re managing it,” he began. “So look, we’re trying to manage this with a number of actions.