. isn’t a brand you associate with half-price sales or the clearance rack. But the company has taken a non-traditional step in non-traditional times by launching its cheapest laptop, the MacBook Neo, and a lower-priced smartphone, the iPhone 17e—both priced at $599.
This isn’t a panic move by Apple. As its earnings reports have shown, consumers are still buying Apple products and services. In fact, revenue and earnings are up year over year.
The likely catalyst for this move is the surging price of memory chips. Apple is using its supply chain and balance sheet to launch a price war that its competitors will not be able to match.
Specifically, Apple isn’t offering stripped-down versions of its popular products. Instead, the company is absorbing the rising chip costs rather than passing them on to consumers.
But make no mistake: Apple will feel this. Apple CEO Tim Cook acknowledged that Apple expects “market pricing for memory increasing significantly” and it will start this quarter.
That’s what makes this move fascinating. There’s no indication that Apple has to eat the costs. In fact, it launched other products alongside the $599 MacBook and iPhone 17e. But this is a competitive battle the company is choosing to fight.
A Shrinking Market Can Magnify Apple’s Advantage
The macro environment amplifies Apple’s advantage. The International Data Corporation (IDC) projects global smartphone shipments will fall 13% this year, with PC and Chromebook sales dropping 11%.
This kind of market contraction favors scale players who can weather volume declines without bleeding cash. If the pie is shrinking, a well-capitalized company that cuts prices doesn’t just hold share; it can take share from rivals forced to protect margins above all else.
That market share growth may exceed expectations. IDC forecasts that soaring memory costs will make it unprofitable for some manufacturers to produce low-priced Android devices, effectively conceding that market to Apple. And as Apple owners know, once consumers enter that company’s iOS ecosystem, it takes a lot to get them to switch out of it.
More Storage, More Pressure on Competitors
As mentioned, Apple isn’t offering stripped-down products. The iPhone 17e doubles base storage to 256GB compared to last year’s model, strengthening the value proposition for consumers even as it compresses Apple’s own near-term margins.
That tradeoff is intentional. By raising the baseline at a flat price point during a period of elevated memory costs, Apple is effectively raising the bar for what a competitive product must offer. This move will make it harder and more expensive for rivals to match specs, price, or both. For investors, the key question is how long Apple is willing to sustain margin headwinds in exchange for structural share gains in a down cycle.
A Multi-Front Competitive Play
The introduction of these products may also help narrow the gap with Apple’s entry-level models in markets like China and Japan. Last year’s launch of the iPhone 16e helped Apple capture 11% of U.S. iPhone sales in the quarter that it launched.
It’s also important to note that this pricing is limited to those two models. According to Bernstein Research, the rising costs of memory, storage, and processor chips could cause Apple’s cost to build the iPhone 18 Pro Max to rise 25%. But Apple will use that product as well as its premium MacBook Pro and MacBook Air to offset some of the margin pressure from its lower-priced devices.
Is AAPL Entering a Buy Zone?
There’s a lot of wisdom to buying and holding AAPL stock for the long haul. Its ecosystem gives it a special position in the technology sector, and tech investors don’t assign much weight to daily stock movements.
Still, the sector does attract a fair amount of active traders, which is where AAPL may present an opportunity. Back in January, AAPL dropped into oversold territory around $248. At that time, the MACD was also showing bearish momentum. That turned out to be a buying opportunity for active traders, as the stock then climbed to around $278.
A similar pattern is starting to form now. The MACD is once again showing bearish momentum, but the relative strength indicator is not quite in oversold territory. Since the stock is in an active downtrend, options traders may try a bull put spread. Investors could buy the $247.50 put and buy the $240 put simultaneously. The premium will be smaller, but the downside risk is capped if AAPL stock breaks support and falls below $248.
