Apple price hikes loom as AI drives memory chip costs to unsustainable levels

AI is hurting Apple in more ways than one: it may force iPhone price increases

It's been called RAMageddon: AI's insatiable demand for hardware has caused a worldwide shortage of memory chips. Now outgoing Apple CEO Tim Cook is warning its customers that your next Mac, iPhone, or iPad could be more expensive thanks to surging memory and storage chips costs. In a recent interview, Cook told the WSJ that price increases are "unavoidable," in spite of efforts to absorb chip costs that have increased fourfold since last year. He described the situation as "unsustainable." Cook didn't name which products will be affected or when prices will rise, but he's raised the alarm about the impacts of RAMageddon before. In April, after delivering record quarterly sales, he said that these higher costs could impact Apple's next business results. Incoming CEO John Ternus also warned about the issue that same month. If Apple raises prices, the iPhone seems almost certain to be impacted, memory supply experts told the Financial Times. The company is expected to launch its next iPhone in September, which gives it the opportunity to announce increased prices. Of course, Apple sells many other devices that contain memory (DRAM) and storage (NAND) chips, including the Apple Watch, Mac, iPad, and Apple Vision Pro. It's not clear how much more expensive any of these products will be, although research firm TechInsights gave the WSJ its estimate. It said Apple would need to add another $270 to the next iPhone Pro to keep its profit margin intact. The iPhone 17 Pro starts at $1,099. So far AI has not been a particular boon to Apple. The company is already under pressure to figure out its AI strategy for its devices. It even paid a $250 million settlement earlier this year to end a false advertising lawsuit filed after it failed to deliver the AI features it promised two years ago. The company's Worldwide Developers conference held earlier this month showed progress on fulfilling those previous AI promises, including an overhaul of Siri. Of course, more on-device processing could mean more need for memory -- a trajectory that seems destined to end with consumers paying more for Apple products.

Apple's next price hike could be bad news for Android buyers too

AI's massive appetite for memory chips is driving up component costs, putting pricing pressure on the entire smartphone industry. Apple's expected price hikes may not stop at the iPhone -- they could reshape Android pricing, too. In a recent interview with The Wall Street Journal, Apple CEO Tim Cook acknowledged that the company is preparing to raise prices due to soaring memory and storage costs. He didn't say which products would be affected or when the increases would arrive, but the signal itself is arguably more important than the details. When the world's biggest smartphone brand says higher prices are unavoidable, it rarely remains an Apple-only story. The immediate assumption is that the iPhone 18 series could become more expensive later this year. That may happen, or Apple could spread the increases across other products first. Either way, Cook's comments effectively validate what much of the industry has been hinting at for months: the cost of building modern consumer electronics is rising, and somebody eventually has to pay the bill. For Android manufacturers, that message could prove especially useful. Many brands have already warned about mounting costs tied to components, manufacturing, tariffs, and AI investments. Some have raised prices outright. Others have held the line, likely knowing that consumers are far more sensitive to price hikes. Historically, when Apple moves first on pricing, the rest of the market gains breathing room. If consumers are already adjusting to a more expensive iPhone, it becomes significantly easier for Android brands to justify charging more for their own devices. Suddenly, a $50 or $100 increase on a flagship Android phone doesn't look quite as dramatic when Apple's products are climbing too. The irony is that smartphone companies aren't just fighting AI companies for components -- they're also trying to add more AI features to their own devices. Every new AI-powered assistant, image generator, translation tool, and productivity feature increases memory demand, making smartphones more expensive to develop and manufacture. That's why Cook's comments feel like a preview of where the broader industry is headed. We've already seen executives from Android brands caution that smartphone prices are under pressure. More recently, Nothing co-founder Carl Pei suggested that rising costs across the industry could eventually impact consumers as well. Apple's public acknowledgment now adds even more weight to that narrative. For Android manufacturers that have been hesitant to raise prices, Apple's move may provide the perfect justification to finally pull the trigger.

Tim Cook says Apple price hikes are unavoidable as AI drives memory costs higher

Apple has spent much of the past year resisting a problem that has already severely affected the broader tech industry, with soaring memory and storage prices driving up the cost of nearly everything that relies on RAM and storage. But according to a recent Wall Street Journal report, that may no longer be possible. Speaking to the publication, Apple CEO Tim Cook said price increases are now "unavoidable" as the cost of DRAM memory and NAND storage continues to climb. The surge is being driven largely by the AI boom, as cloud providers and AI companies compete for the same chips used in consumer devices. Apple has largely shielded customers from those increases so far, but Cook indicated that strategy has reached its limits. Apple held the line longer than most rivals Apple's ability to avoid major price hikes has not happened by accident. The company entered 2026 with inventory secured before memory prices accelerated and used its scale to negotiate supply agreements that many competitors could not match. Earlier this year, Apple also relied on product configuration changes, such as removing lower-capacity options from some Macs, instead of directly raising sticker prices. Recommended Videos The challenge is becoming harder as Apple prepares a new generation of AI-focused products. Following WWDC, the company is already testing its next-generation Siri experience and broader Apple Intelligence upgrades. Those features place greater demands on memory, which helps explain why some of Apple's most advanced Siri capabilities are currently limited to devices with higher RAM configurations. Apple is also expected to launch new Macs and its long-rumored foldable iPhone later this year, both of which could require larger memory allocations to support increasingly capable on-device AI features. Reports have already suggested that the iPhone 18 Pro could start at around $1,399 this fall, a $300 increase over its predecessor. AI is forcing Apple's hand Cook told the Wall Street Journal that Apple is willing to use its financial resources to help secure memory supply, but he ruled out building Apple-owned memory or storage manufacturing facilities. "We can't do everything. We know what we're good at," Cook said. Despite Apple's influence over suppliers, that leaves the company exposed to the same market forces affecting the rest of the industry. With memory suppliers increasingly prioritizing AI infrastructure customers and analysts warning that shortages could persist into 2027, Apple's long streak of absorbing those costs may finally be coming to an end.

Apple to raise prices due to memory chip shortage, CEO Tim Cook says: Report

Apple CEO Tim Cook announced plans to increase product prices due to soaring memory and storage chip costs, driven by AI demand. He stated price hikes are unavoidable as the company struggles to absorb escalating component expenses. Cook emphasized the need for memory pricing and supply to stabilize for consumer products. Apple plans to raise prices on its products to offset increasing memory and storage chip costs, CEO Tim Cook told the Wall Street Journal in an interview. A surge in AI-driven demand for data centers has forced consumer electronics companies into a fierce competition for dwindling supplies of the key components, driving prices sharply higher. Also read: Tata's Apple iPhone factory in Tamil Nadu faces shutdown threat over farmland water contamination Groups representing automakers, retailers, electronics firms and others had ⁠warned ⁠earlier this month that the increasing demand for memory chips could lead to dramatic price hikes in U.S. consumer goods and disrupt supply chains. "Unfortunately, price increases are unavoidable," Cook told WSJ. "We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers from the increases, but the situation has become unsustainable." Cook, who will hand over the reins to John Ternus ⁠in September, did not disclose when or how much prices might rise, nor which products could be impacted. Apple is reportedly on track to release its first ⁠foldable iPhone in September, alongside the iPhone 18 Pro and Pro Max. Memory and storage costs are both concerns for the company, with particular emphasis on the DRAM market, Cook told the Journal. He noted that more supply is being allocated to high-bandwidth memory, which is used in AI servers. Also read: Italy's antitrust regulator probes Apple over cloud services under Digital Market rules "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," he said. "We definitely need memory pricing and supply to return to reasonable levels for consumer products. That's the bottom line." China has leading domestic memory and storage companies, but U.S. firms would likely need licenses to work with them under national-security ⁠rules. Asked if restrictions should be eased, Cook said: "Everything needs to be on the table," adding, "I think we should look at all supply." In the interview, Cook indicated that Apple is prepared to use its cash reserves to boost memory supply, without offering details. "We're willing to use our balance sheet to help be a part of the solution," he said. "Obviously, more capacity is needed." Cook clarified that Apple has no plans to use its cash and silicon expertise to build its own memory and storage factories.

Apple Plans Price Hikes as AI Companies Drive Up Chip Costs | PYMNTS.com

Cook declined to say when the planned price increases would take effect, how large they would be, or which products they would include, according to the report. "We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers from the increases, but the situation has become unsustainable," Cook said, per the report. The prices for memory and storage chips have quadrupled over the past year, driven by artificial intelligence companies' demand for the products, according to the report. In response to the rising costs, other smartphone makers have raised prices, as have companies that make PCs, game consoles and other devices that use the chips, the report said. While Apple is one of the world's largest buyers of chips and has long used its market power to command lower prices from suppliers, the company now must "wait in line" behind AI companies, per the report. Cook told WSJ that he has never seen a surge in commodity prices like he's seen over the past six months. "This is a hundred-year flood," Cook said. "I've never seen anything like it in any area in over 40 years." It was reported in March that the AI industry is causing a shortage of memory chips needed by the smartphone industry even as AI features become part of the latest mobile devices. The demand for memory chips from AI data center operators has left device makers facing higher prices and a shortage of chips that could slash smartphone sales by 13% this year, according to the report. It was reported in January that the global AI boom was beginning to alter the economics of smartphones and other consumer electronics by causing memory components to be diverted toward large-scale AI systems under long-term supply agreements. In a June 16 press release about global smartphone sales, Counterpoint Research said supply chain stability has been an increasingly important factor in the industry. Research Director Tarun Pathak said in the release: "It is now clear that memory prices will remain high for the rest of 2026, and OEMs have adjusted the playbook. To navigate these pressures, they are now implementing a mix of price increases, product launch realignments and aggressive cost-optimization tactics, including devices 'cutting corners on different features' and more efficient channel management."