Comment by SXX
2 months ago
768GB RAM pipe dreams make no sense to Apple. By discontinuing 256GB / 512GB M3 Ultra and raising prices $5000 -> $7000 on Macbook pro with 128GB they basically confirmed how badly RAM shortage affecting them.
768GB is 64-times of 12GB which is rumored to be amount of RAM in new iPhones. Imagine what profit margin 768GB Mac Studio gonna need in order to justify making one instead of 64 iPhones.
Apple is the company that is okay about selling microfiber cloth for $100 and wheels for $700. Imagine how bad price hike for M3 Ultra 256GB / 512GB had to be in order for them to just discontinue them instead of getting free money out of desperate local AI folks.
They could treat the extreme spec machines separately from the prosumer ones, like they did with the Xserve. Let business customers spec up to 768GB (say) who are prepared for a $20-25k price tag, while keeping them away from the stores and usual consumer supply chains (Amazon et al). It may not be a big enough market segment for them to care about anymore, though.
They can do it, but that gonna need to be different SKU not Mac Studio. Otherwise news will be full of discussions about Apple price hike from $8000 to $24,000 or who the hell knows $48,000.
So yeah the only way I see them selling it is usual "call us" enterprise price tag.
But since its not what Apple usually do its easier to sell 4x Mac Studio 256GB RAM boxes with interconnect for lets say $12,000 - $15,000 each.
I don't think it's needs 'call us' just a separate SKU, I mean if they called it Xserve Ultra and it was just a studio in a 1u format with dual PSUs and extra RAM, it would fly off the shelves.
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Imagine if they bring back the Mac Pro with 768GB of ram to compete with the $100k DGX Station.
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> Let business customers spec up to 768GB who are prepared for a $20-25k price tag
There is a clear difference between $25k and $100k.
64 iPhones at retail price is already around $64k. For something at 768GB to be profitable at Apple's terms, this has to retail at $100k for it to be profitable. That was the OP's point.
They'll sell more $20-25k Macs when Goldman green lights Apple Card credit limits that will fit one of them.
Apple Card already offers credit limits high enough for it
Honestly you're still looking at (from my understanding) ~3 minutes prefill (TTFT) even with architectural improvements and so on with a 32k context window (against a large model). How is this going to be competitive with Nvidia and all of the tricks massive scale get's you to parallelise context across many machines?
Is it supposed to be? I think the point with some of these Macs is you get the capability in something the size of a heatsink from Intel's Netburst architecture era, or a Macbook light enough to stick in a backpack and take with you to lunch.
If you're talking about chaining together multiple GPUs you're talking about a different game -- I suspect, anyway. Seems like a high-spec Mac would be good for development and testing. Arrays of GPUs, better aimed at production use.
The message I’m getting is that Apple will never compromise on its healthy margins. If something becomes basically unaffordable for their target market, they’d cut the production and even discontinue the product, than take a hit on margins. Their business model is refreshingly simple.
That works only if the product is the product.
Iphones/tablets drive app sales/apple subscription services, if they force a user to move to android they may never return.
Why do you think they sell the iPhone 17e/se? They need to maximise their user base as its ongoing recurring income stream.
Yes - they create new/cheaper products for a different consumer but not at the cost of their margins. Vision Pro may have been the only device in recent history that likely had slim margins (if any).
Apple is not gonna risk their iphones, as they are their flagship (aside even from giving them higher margins). My opinion is that, as we are talking about ram SHORTAGE (not just for ram price hike) they have to cut the more ram hungry models to be able to keep up with their projected production/demand (at reasonable ram prices). Getting iphones "sold out" is not a great thing for apple.
Once/if the ram shortage ends, they will continue increasing the ram caps as they were already doing, because then selling ram-heavy macs will not interfere with the rest of their products.
It's just a planned economy failing the way planned economies often do: the central planner failed to predict the demand correctly. Instead of trying to secure additional stock from the market at spot prices, they are simply waiting for the next batches they had planned for.
I don’t think that represents the scenario at all, not to mention the fact that it’s literally not a planned economy (but also not very analogous to one, either).
What’s really happening is that the effort of securing additional stock isn’t worth it because the price is so high that there aren’t enough buyers.
If ground beef were to suddenly cost $50/pound, McDonald’s doesn’t raise the price of the Big Mac to $25 and hope people buy it, because it makes zero sense for their business model. Sure, some fancy restaurant will still be selling hamburgers, but not your chain of thousands of working class fast food restaurants. McDonald’s would find some other alternative item to sell.
The truth is that nobody’s going to be buying Mac Studios that cost $25,000. Not even enterprises.
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I actually think Apple is right in increasing prices, and in fact should have increased it more.
Their target market is composed of people that would pay for it nonetheless. They should have tightened the screws a bit more.
I think you have an excellent point and I'll bet someone at Apple has all this in spreadsheet and is making that case.
However, I think without the very high end machines Apple is also seeding a lot of professional middle market too.
If the choice is between, say, a Framework desktop vs nothing from Apple I'll obviously pick the Framework.
If I get used to a Framework desktop running Linux then I'd probably stop buying MacBook Pros.
Right now Apple has a chance at capturing local AI but that opportunity won't last forever.
If they cared about local AI market they would price hike M3 Ultra instead of discontinuing them. After all they conviniently introduced RDMA just few months before that.
Initially when it happened everyone expected they did it because they planned to announce M5 Ultra shortly, but its not looks like this is happening.
Now IMHO its indicates they simply run out of RAM supply.
If you’re truly serious about local AI you’re not using a Mac. A Mac is for people who want the best of both worlds, GPUs are much faster if memory is equal.
do you mean ceding that market?
Yes! Thanks for point that out as it's an important difference.
Mea culpa, dyslexic moment.
This is only true under the assumption that RAM price per GB scales linearly.
It's even worse than that. Demand is so high so every next GB will be sligly more expensive. There is a lot of smaller hardware manufacturers that unable to secure DRAM chips at any price, there just no free capacity on market.
Of course Apple is massive, but if they announce inference boxes that everyone wants they need to make 10,000s or even 100,000s of them.
And it's very much likely they'd rather sell 600,000 - 10,000,000 more iPhones or Macbooks Neo. End users bring Apple money with every OpenAI / Claude subscriprion sold through their platform.
And inference boxes is just one-off sale of hardware that will bring no further income.
Forward planning though.
They are assuming that they are able to get ram in the future, once the AI bubble either dissipates or pops. Its far easier to build something you planned for 3 years ago, than crash build it in 3 months.
Of course if RAM prices crash Apple might of bring high RAM options back. We just cant bet on it as consumers.
Right now RAM shortages are bad to the point where likely even Apple have to decide what products they make and what they discontinue.
There been short time where M3 Ultra with 256GB / 512GB been best offet on market because Apple lagged with price increase. Now HN crowd expect Apple of all companies jump into price war with Nvidia and to subsidize their inference hardware.
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