Research Institution's View: Profit Margin Pressure May Be Greater Than the Market Imagines
Wall Street research firm Lynx Equity Strategy highlighted in its latest report that Apple may face a more "severe" cost squeeze: even though AAPL has already retreated about 10% this year, the stock price may still remain under pressure. The firm believes that the market is overly optimistic in pricing the impact of this cost chain.
Supply Chain Variables: From Kioxia to Samsung, Pricing Mechanisms May Change
Lynx's survey shows that negotiations between Apple and its long-term supplier Kioxia have noticeably cooled. One reason is that the previously lower long-term agreement prices have squeezed the suppliers' profit margins. Once the relationship weakens, Kioxia's supply to Apple might be less than Apple's demand expectations.
On the path of "filling the gap," Apple may need to increase its procurement from Samsung. The key difference is that without the constraint of long-term agreements, additional supplies are more likely to be priced at market rates, with significantly greater cost flexibility. The report cites overnight information from Taiwan, indicating that prices for Samsung's related NAND might get raised, with possible increases doubling, which would directly drive up Apple's storage BOM costs.
Another Concern: Hardware Compatibility and Potential After-Sales Risks
Besides being "more expensive," Lynx also emphasizes "more difficult": Apple's flash memory controller is considered to be more compatible with Kioxia's NAND process characteristics. Accelerating the switch to Samsung NAND in the short term could lead to increased performance calibration difficulty, experience fluctuations, and even returns and exchanges risks, thereby further dragging on profit margins and market sentiment.
Amplifier: AI Occupying Capacity, Storage Price Increase May Not Be a Short-Term Fluctuation
These concerns are magnified by more macro factors related to storage supply and demand. Recent Reuters reports indicate that AI infrastructure demand is pushing up storage chip prices, putting pressure on consumer electronics manufacturers' costs and pricing, and the high-price environment could persist.
Meanwhile, multiple industry reports note that some NAND manufacturers are more certain in their judgment of tight supply over the next one to two years, and mismatches in supply and demand could lead to more frequent price fluctuations.
What the Market Will Focus on Next
Short-term focus may fall on three points: whether Apple can relock a more stable long-term supply arrangement; whether the rise in storage prices continues to spread to more contracts; and whether there are signs of "downward revision" in the upcoming earnings report in terms of the company's statements on profit margins and hardware costs.
