Ever wonder just how powerful Apple’s market status is? To give you an idea, here’s a passage from a searing report published by The Wall Street Journal published a few days ago:
“Around the end of 2015, Sandisk refused Apple’s requests to send additional supply because it already had customers willing to pay more. Blevins threatened a Sandisk salesman with retaliation, saying he would have Sandisk’s chief executive, Sanjay Mehrotra, “crawl on his knees” back to Apple, according to a person familiar with the call.”
For years, I’ve heard anecdotes about Apple’s immense bargaining power in the supply chain. After all, the company is among the biggest buyers of a wide range of components, from lens and silicon to memory and display panels. In 2026, no component has roiled the consumer electronics industry quite like memory chips, all thanks to the demand from the AI sector.
Apple is feeling the sting, as well. This year, the company has not only hiked the cost of new products, but also given a bump to the sticker price of older products, which historically get a price cut when new-generation models arrive. And yes, Apple has admitted that the memory shortage (and the resulting price hike) is simply unprecedented. But it seems players in the storage market aren’t just happy with reaping massive profits, but also smiling with some sweet revenge.
Apple has typically strong-armed suppliers into giving it preferential treatment, not just in terms of early access and allocation, but also in terms of pricing. But as per the WSJ report, Apple’s negotiation tactics have been nothing short of eyebrow-raising. Or, for lack of a better word, downright barbaric exploitation of its market status.
The company reportedly employed numerous hard tactics to further reduce the price of flash memory it got from suppliers. The first one was a no-commitment policy. And if the prices fell, Apple would outright refuse deliveries of memory chips that were custom-made for its devices, leaving suppliers with massive stockpiles.
At the head of these moves was Apple’s chief of procurement, Tony Blevins. “Blevins, who left Apple in 2022, sometimes set up back-to-back meetings with suppliers so that rival sales teams might run into each other, stoking competitive tension,” notes the report. The meetings often ran past midnight without a dinner break, forcing clients to pack protein bars to prepare.
Apple’s contract even had a stipulation that allowed it to audit the suppliers’ books, so that the company could ensure that it was getting the lowest price. The company had such deep knowledge of the suppliers’ operations that it was even aware of the operations on the factory floors.
Such was the extent of the auditing that Apple even won itself a discount from Deloitte, which conducted audits on Apple’s behalf. In one instance, when Apple learned of Micron selling flash chips to another company at a lower price, Apple dragged the matter to court and won a settlement to the tune of millions of dollars.
But the most shocking incident involved storage giant Western Digital. Here’s the recap:
“When flash supplies tightened around 2017, Western Digital, Sandisk’s new owner, required Apple to pay a fee to reserve flash chips without committing to sell it any, said people familiar with the strategy.
Blevins was apoplectic. He wrote the date on his office whiteboard and circled it, texting a photo to Western Digital executive Mike Cordano and promising payback, according to people familiar with the exchange.
Blevins got his chance when flash prices fell a year later. Cordano and his colleague Jerry Kagele went to Blevins’s office with a refund check as a peace offering, according to people familiar with the meeting. Blevins demanded they never ask for a reservation fee again, which the men agreed to in a handshake deal, people familiar with the interaction said.
As a punishment, he told the men that if Western Digital wanted Apple to buy its flash chips, it would have to pay the iPhone maker to test them, the people familiar said. Even then, Apple wasn’t obligated to buy any.
Blevins then had them escorted out by Apple security.”
And here’s the surprising part. As the flash prices collapsed over the decade to nearly 5 cents per gigabyte, Apple was charging hundreds of dollars for customers to upgrade the storage on iPhones. During the post-pandemic cooldown as the consumer electronics market plummeted, Apple pocketed approximately $14 billion in profits from flash storage upgrades alone, while the entire flash storage industry was running losses to the tune of $19 billion in 2023.
Apple won’t be the only player in the industry to engage in hard negotiation tactics, but the sheer sway that it commands in the supply chain is in a league of its own. In 2026, Apple’s position has weakened considerably because AI giants are willing to pay a much higher price for memory chips, and memory makers are happy to oblige. In fact, the stakeholders are seeing it as a sweet retribution after years of being put in a tight position by Apple.
The supply chain situation is not going to ease next year, so it would be interesting to see how Apple tackles the situation. Apple absorbed the rising cost of memory and storage longer than its rivals, but in 2026, the inevitable happened, and the price of Apple gear went up. I am not sure what happens next year, but if the bill of materials continues to rise, prepare your wallets for an even deeper cut on Apple purchases.
