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Discussion (95 Comments)Read Original on HackerNews
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
Also, when software is poorly optimized that implies it is possible to optimize it.
"Make this OS and ecosystem more efficient. Make no mistakes."
Price go up, demand go down: https://en.wikipedia.org/wiki/Supply_and_demand#/media/File:...
(The iPhone is only a premium brand, not a Veblen good).
These announcements have another effect of boosting sales now. Summer is usually a sales slump so selling more now is probably good for Apple.
Hmm. Even if iPhone users can theoretically stomach the increase, they have many other options available, whereas if the cheap $200 phones are the bottom of the market, there's no other real options.
I'm in the ~$450 USD Pixel range atm, and never buy the current flagship or anything. If that increases by $200, I'll look to the used market for the same phone. I really don't care that much about it, and it mostly acts as a fancy 5g modem for tethering. Plenty of younger people are already reverting to more primitive phones or physical media, and I wonder if it's just older addicted richer millenials that'll keep buying at even more than the already idiotic prices.
That's an effect that has always been claimed (younger generations rejecting new tech and going offline/low-tech/anti-...) but it's never been more than a minor very temporary fad. In the mid to long term, younger people are always at the forefront of tech adoption and it would be very surprising if it was different this time.
Id love to know how many of em
I’d love to know how much “plenty” in the parent’s perspective stacks up against just this one individual model line and whether it is at all distinguishable from noise.
Apple’s margin targets aside, the prices are rationale
Trendy teens and 20 something’s still have iPhones, many just also have point and shoot cameras. This is more of a desire to be present in some contexts alongside aesthetics (of the photos and the gear), than a rejection of having 2 teraflops in their pocket.
It’s important to understand the why
What they have are sweet margins and deals in place that helped them to take some time until the inevitable came to be.
In the other hand maybe all these prices drive folks to program like we used to, conscious of the hardware limitations, without extra slots to rescue from bad programming.
It seems like Apple, of all companies has been about doing more with less memory.
That would seem to have helped in the % of BOM getting wrecked by the supply chain and discipline of developers in its ecosystem.
I don’t understand why this comes up on all of these topics.
Dire need will compel a naked woman to learn to weave her own clothes, but there is no weaving machine for just making more efficient software. (American) Software developers are expensive, now I guess compute will either be expensive, more centralized, or have much more demand from competing interests (vibe coders who are implementing their own bespoke software or abandonware-for-one), and compute-for-code (GenAI) is a whole emergent engineering problem.
Then we hunker down and listen to or read a piece by Muratori, I guess, just practice some of those principles? But what seems to keep happening is that we get stuck by constraints that go beyond just writing more efficient code as a solo contributor on a solo project. That you can predict the efficiency of the code by the application domain suggests that there is a whole big system (of people and processes) above our heads that is not simple for any person or group of people to untangle.
Yes, Casey and friends are 100% spot on.
A big selling point for iPhones is that they are much more expensive than the Other phones, so it is absolutely necessary for Apple to make sure it's phones keep a 50% price luxury bonus, or many will stop buying them.
TL;DR - ultra-expensive iPhones are a feature, not a bug, like ultra-expensive watches
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 that happens (I personally believe there is a good enough probability), then Apple will come out looking prescient for not getting locked into long term costly contracts.
It remains to be seen for how long the investors in the AI companies are willing to wait for total market capture and/or growing profits.
I've just got a new MBP this month, because I expect the prices to rise significantly with the new macbooks in the fall.
Why?
Alongside dark mode, apps should have a “slim mode” that turns off some of the more wasteful features in order to run on older/smaller hardware.
Some sites like Google were able to measure the user-engagement cost of slowness and chose to optimize, but they're exceptional. I doubt most businesses know the cost.
No one cares anymore, and I doubt that any hardware supply bottlenecks will improve that. It's not something that anyone care to measure.
and when android go was thing there were (are?) lighter apps targeting that like google maps go even
It is time to activate the Chinese.
Seriously let ASML sell to CXMT etc.
Aren’t prices sky rocketing precisely because of excess demand? And they’d collapse in turn if demand disappeared.
My understanding of economics is entry level so please forgive my ignorance. I’m just curious what you mean.
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 sleaziest companies that have come out of Silicon Valley in a long time, and that's really saying something.
In this particular situation there is a bit of inelasticity of supply because it takes a long time to spin up a DRAM factory and if people believe it is temporary they won’t make the investment
China is increasing their production of DDR5 and SSDs, but much more slowly than it would have been possible in a free market.
The current prices for DRAM and SSDs would have never happened if USA had not started to sabotage the Chinese memory industry a few years ago, presumably because Micron wanted to eliminate their competition.
The US sanctions against memory producers have started exactly when Apple was considering the use of Chinese memories in their smartphones, so Apple had to cancel their plans.
The claims that the sanctions against the Chinese memory producers have anything to do with US "national security" or with military applications are just a big shameless lie.
Military applications are content with older memories, which China can produce in sufficient amounts. The SOTA DRAM modules and SSDs are more important for consumer products and the US "sanctions" have the only purpose of maintaining artificially high prices for the consumer products, which steals money from millions of people all over the world.
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 in the subsequent years.
I do believe we will always need more RAM even if there is a market correction or AI bubble burst whatever you want to call it. It will not destroy AI completely, just cleanup the market. But how much will we need? I guess the chip makers makes their own guesses but don't want to make their company in peril either.
Whales being whales, they will pay the highest end iphone at any price, no question. But the market is not made entirely of whales.
https://ourworldindata.org/grapher/historical-cost-of-comput...
And the AI data-centers are using the RAM so productively, that they are willing to buy them at any price whatsoever.
So the market is not free at all, the lack of competition is maintained by force.
Already for many years, the prices of various products like smartphones, SSDs and memory modules have been kept artificially high by the anticompetitive measures called "US sanctions".
It had even led to some anomalies where Apple machines were a better price than similar Windows machines.
Yeah, it's a laudable miracle that this $4T+ company could survive this long without raising prices on such razor-thin margins.
Wonder if those costs will increase too as storage price is going up.
Because they were already selling memory at crisis prices when it was dirt cheap.
And now they want those crazy margins again.
Tim Apple has never been one to shy away from squeezing out another dollar.
Regardless of which one it is, I absolutely despise the cartel that is running the US government right now, that created this situation for their crony big tech buddies.
It is part of the global trend to "rent everything, own nothing".
High inequality means that everybody wants to sell to the hyper-rich individuals and corporations. And selling products and services to the working class is a losing money endebour.
So, money accumulation means asset accumulation, that means more renting, that means more money...