By Angela Palumbo
Apple launched several affordable products this week, defying a trend in tech hardware that has seen rising costs lead to higher prices.
Apple is known by consumers for being a higher end tech hardware company. The lowest priced Apple products tend to still be more expensive than the lowest cost models from competitors. But Apple has built out an ecosystem of products that seamlessly interconnect, helping it to become the second largest company in the world by market cap, behind Nvidia.
Shareholders and consumers have wondered if Apple will raise prices further as memory costs skyrocket. Demand for memory is outpacing supply due to the need to power artificial intelligence. Tech hardware companies like HP Inc. and Dell Technologies have raised prices to offset some of these cost headwinds.
Apple CEO Tim Cook said on the company's last earnings call in January that he wouldn't want to "speculate," on whether or not Apple would be raising prices.
It's because of this backdrop that the launch of several new products from Apple this week has shocked Wall Street and consumers.
Apple introduced the iPhone 17e on Monday and the MacBook Neo on Wednesday. The iPhone 17e starts at $599, compared with the starting price of $799 for the standard iPhone 17. The MacBook Neo also starts at $599, which is less than the traditional price of a MacBook Air at $999.
Introducing lower cost products this week was no accident. Apple has just made it easier for people to become customers in an environment where competitors are raising prices.
"The MacBook Neo is one of the most important announcements for Apple in the Mac product line and represents a shift in the history of the Mac," Francisco Jeronimo, VP for Data and Analytics at IDC, wrote on Wednesday. "Apple is aggressively aiming to grow market share while expanding the ecosystem."
These device announcements also prove that Apple is in a strong position to handle a volatile cost environment, says Evercore ISI analyst Amit Daryanani.
"We think investors are underappreciating how well AAPL is perhaps managing through the memory inflation issue and, critically, how recent product launches demonstrate its ability to offset these pressures," Daryanani wrote on Thursday. He rates Apple as Outperform with a $330 price target.
Apple also announced a New MacBook Air powered by an M5 chip, which costs $1,099, a $100 increase from its predecessor. Daryanani believes that due to memory cost increases, Apple's cost per MacBook Air has gone from between $45 and $60 per device to $100 per device.
"Given AAPL is raising their prices by $100, we estimate, if units/mix hold up, that it more than protects margins on MacBooks and it could actually help expand the MacBook margin profile," Daryanani said.
Other analysts are also confident in Apple's ability to protect margins. Morningstar's William Kerwin wrote on Thursday that he thinks Apple is "adept at negotiating a ballooning pricing environment while maintaining a strong margin."
"We expect Apple to continue expanding margins, even amid tariffs and memory cost pressures," he added. "We believe Apple's premium prices have built-in buffers for component cost inflation and that it receives best-in-class contract pricing for memory."
Write to Angela Palumbo at angela.palumbo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 05, 2026 15:00 ET (20:00 GMT)
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