Apple price increases loom as Tim Cook calls AI memory demand 'unsustainable'

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 CEO Tim Cook warns AI-driven price increases are unavoidable -- says company is trying its best but 'the situation has become unsustainable'

Apple CEO Tim Cook has warned in an interview with the Wall Street Journal that price hikes on Apple products are unavoidable because the price of memory has increased to a degree that the company must now pass on increases to customers. The outgoing chief executive of Apple did not disclose the scope of the increases or when to expect them to happen, though the warning itself is noteworthy. Cook said in the interview that price increases had become necessary due to skyrocketing prices of LPDDR and 3D NAND memory, which the company uses in its PCs, smartphones, tablets, and other products. He noted that Apple had attempted to offset rising component costs and protect customers from higher prices, but indicated in the interview that the company could no longer absorb the increases indefinitely. While Cook declined to discuss timing or the magnitude of the planned price hikes, some Apple products may see higher prices sooner rather than later. The company already raised the base price of its Mac Mini last month and eliminated its highest-end model. TechInsights estimates that Apple will need to hike the price of a flagship iPhone Pro model by about $270 to maintain its current gross margins, which could push flagship iPhone pricing into a substantially higher price band. To make matters worse, Apple faces rising DRAM requirements as it expands memory-hungry on-device AI capabilities. Apple is a unique company in the sense that it is both one of the world's largest suppliers of smartphones and one of the industry's biggest PC OEMs. Still, its Mac business is negligible compared to the iPhone business. Memory makers are more inclined to ship non-volatile NAND memory to smartphone makers as they can ship LPDDR with it, according to Nelson Duann, a senior vice president of Silicon Motion, speaking in an interview with Tom's Hardware. If Duann is correct that NAND makers prefer smartphones because they can bundle NAND and LPDDR sales, then Apple should be among the most favored customers in the industry, not among the disadvantaged ones. Also, keep in mind that historically Apple has used long-term supply agreements, prepayments, equipment financing, and advance capacity reservations to secure key components, including DRAM, NAND flash, displays, advanced packaging, and even semiconductor foundry capacity. As one of the world's largest electronics manufacturers and semiconductor buyers, Apple is among the few companies capable of negotiating with memory suppliers from a position of considerable strength. As a result, Apple is not in a situation where it cannot get enough memory; it can probably get more than other suppliers of smartphones and PCs, but it surely has to buy both DRAM and NAND at a premium. That said, it is not surprising that Apple will have to increase prices; what remains to be seen is the magnitude of the increase. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Memory crisis hits such extremes that 'even Apple can't be safe'

For the past few years, consumers have been swarming to AI chatbots and agents, taking advantage of powerful new artificial intelligence models that are transforming how we live and work. They're now paying for it, but not in the way they probably expected. The AI boom has led to unconstrained demand for memory, creating a worldwide shortage that's leading to increased prices. It's a big enough problem that Apple is finally telling consumers to get ready to open their wallets. Apple CEO Tim Cook told the Wall Street Journal, in an interview published on Wednesday, that the company plans price increases on its products due to the ongoing memory shortages. He called the hikes "unavoidable" and the memory situation "unsustainable." "The world is being disrupted by AI and, at the same time, even before we start reaping the benefits of AI in our devices, we are already paying the bill," said Francisco Jeronimo, an analyst at IDC, in an interview. AI chips, largely made by Nvidia, are taking all the memory and storage that a handful of vendors can produce. Smartphone, PC, and other device makers have to get in line, or pay more for expedited access. But Apple's surprising disclosure, less than three months before Cook steps down as CEO, underscores the widespread impact of the shortage. To date, the iPhone maker has been viewed as particularly insulated from price increases due to its market power. "It tells you the depth of the problem," said Ranjit Atwal, an analyst at Gartner. "Even Apple can't be safe, as much as they have all the expertise and long-term planning, and everything else. This is beyond their capacity to limit the impact." Cook declined to say in the interview when price increases would go into effect and on which devices and models. An Apple spokesperson declined to comment to CNBC.

AI's memory crunch just killed a phone. Even Apple flinched

For a year, AI's appetite for memory chips simply made gadgets more expensive. Now it is killing products outright: Nothing has scrapped a phone, Tim Cook calls the shortage 'unsustainable', and analysts expect the smartphone market to shrink 15% this year. For a year, AI's hunger for memory chips was a price story: your next laptop or phone would cost more. This week it became a product story. Nothing has scrapped its planned CMF Phone 3 Pro, with a co-founder saying the company could not build a budget phone that felt like "a genuine step forward" while memory prices are this high. It is a new kind of casualty. Not a device that costs more, but a device that will not exist. Even Apple is flinching If anyone can buy its way around a shortage, it is Apple, the largest and most aggressive memory buyer on the planet. Yet chief executive Tim Cook has called the situation "unsustainable", and the company is now expected to raise prices, with one analyst calling hikes "fairly imminent". Apple has already killed its cheapest Mac mini over the same pressure. When the best-insulated buyer in tech starts flinching, everyone below it is in trouble. The whole market is set to shrink The clearest sign of damage is at the bottom. Some entry-level phones have already jumped more than 50 per cent in a year, and research firm CCS Insight expects global smartphone shipments to fall 15 per cent in 2026. The cheap end is being squeezed hardest, because the memory that once went into affordable handsets now goes to data centres instead. The retail market for SSDs has all but vanished, and DDR5 prices show no sign of falling. Blame the AI memory race The cause is upstream. Samsung, SK Hynix and Micron have been converting production lines to high-bandwidth memory, the pricey kind that feeds AI accelerators, because it earns several times more per wafer than the DRAM in your phone. DRAM prices rose about 90 per cent in a single quarter, HBM capacity is sold out into 2027, and Nvidia has locked in years of supply while it is available. Consumer gadgets are simply outbid. Why it matters The AI build-out has always had a hidden bill, paid in power, water and now memory. What is new is who pays it. For a year the cost showed up as a slightly pricier phone. Now it is showing up as a phone that never ships, and a market expected to shrink for the first time in years. The industry spent 2026 arguing about whether AI would take your job. It is quietly deciding which of your devices get to exist.

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 Signals Possible Price Hikes as AI Driven Chip Costs Continue to Surge

Apple CEO Tim Cook has indicated that product price increases may become unavoidable as soaring memory and storage chip costs, fuelled by the AI boom, put pressure on the company's supply chain. While no products or timelines have been confirmed, the development could impact future Apple devices. Apple customers may soon have to pay more for their favourite devices, but not because of new features or premium designs. Instead, the reason lies deep inside the global semiconductor supply chain. Apple CEO Tim Cook has confirmed that the company is facing mounting cost pressures due to the sharp rise in prices of memory and storage chips. The increase is being driven by unprecedented demand from artificial intelligence infrastructure, where cloud providers and AI companies are consuming massive volumes of advanced semiconductor components.

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."

Apple plans price hikes as memory chip costs surge: Report

Apple is planning to raise prices on some of its products as soaring memory and storage chip costs continue to pressure the consumer electronics industry, according to a report by The Wall Street Journal. In an interview with the publication, Apple CEO Tim Cook reportedly said the company has worked to absorb higher component costs but acknowledged that price increases have become unavoidable. "Unfortunately, price increases are unavoidable," Cook reportedly told The Wall Street Journal, saying Apple can no longer absorb the sharp rise in memory and storage costs. However, he did not disclose when the planned price increases would take effect, how much prices could rise, or which products would be affected. According to the report, Macs and iPads could see price increases before Apple's next major hardware launch later this year. Apple also recently raised the starting price of the Mac mini. AI demand driving memory costs higher According to the report, the rapid expansion of AI infrastructure has sharply increased demand for DRAM memory and NAND storage chips, driving up costs across the semiconductor industry. The report attributes the surge to: * Increased AI infrastructure spending by Google, Microsoft, Meta and Amazon. * Growing demand for high-bandwidth memory (HBM) used in AI servers. * Reduced memory supply available for consumer electronics. * Higher component costs being passed on by memory suppliers. TechInsights reportedly estimates that prices for both DRAM and NAND have quadrupled since last year and could continue rising through 2027. The report adds that AI servers are consuming increasing volumes of memory and storage chips, making it more difficult even for Apple to secure adequate supply despite being one of the industry's largest buyers. Cook reportedly said both memory and storage pricing have become major challenges for Apple, particularly DRAM, as manufacturers allocate more production to HBM for AI servers. He added that memory pricing and supply need to return to more reasonable levels for consumer products. For consumer devices, DRAM serves as working memory that enables apps to run, while NAND flash is used for long-term storage of photos, videos, apps and other files. Higher costs could affect future Apple products The report says Apple may eventually need to pass some of the increased component costs on to customers to maintain its profit margins. According to the report: * Apple has not confirmed which products will see price increases. * TechInsights estimates a future iPhone Pro could cost about $270 more if Apple fully passes higher memory costs on to consumers. * Apple is also expected to require additional DRAM for upcoming AI-powered features, including an upgraded Siri. Apple looks to support supply expansion According to the report, Samsung, SK Hynix and Micron dominate the global DRAM market, while Samsung, SK Hynix, Micron, Kioxia and Sandisk are among the leading NAND suppliers. Although memory manufacturers are expanding production capacity, Morgan Stanley reportedly expects supply constraints to continue. Key forecasts include: * DRAM wafer production capacity could grow by around 30% by 2027. * Memory supply for consumer electronics could still remain up to 15% below demand as manufacturers prioritize AI-focused products. Cook reportedly said Apple is prepared to use its financial resources to help improve memory supply, adding that additional production capacity is needed. However, he also said the company has no plans to build its own memory or storage manufacturing facilities. The report adds that Apple spends tens of billions of dollars annually on memory and storage chips, making it one of the world's largest buyers of these components. While the company has historically used its purchasing scale to negotiate favorable pricing, growing AI demand has intensified competition for available supply. Cook reportedly described the recent surge in memory prices as a "hundred-year flood," saying he has never witnessed a commodity price swing of this magnitude during more than 40 years in the electronics industry.