Apple plans to raise prices on some products as AI-driven demand pushes memory and storage chip costs sharply higher. Outgoing CEO Tim Cook said the company had tried to absorb the increases but could no longer fully protect customers from them.
“Unfortunately, price increases are unavoidable,” Cook told The Wall Street Journal. He described the current cost pressure as unsustainable after prices for key memory components increased as much as fourfold from a year earlier.
Apple Has Not Named the Affected Products
Cook did not say which devices would cost more, when the increases would begin, or how much Apple planned to add. Products that use DRAM and NAND storage include the iPhone, Mac, iPad, Apple Watch, and Apple Vision Pro.
The next iPhone range is expected in September, giving Apple an opportunity to adjust prices during a major product launch. Macs and iPads could receive increases sooner because Apple can update their pricing outside its annual iPhone event.
TechInsights estimated that Apple might need to add around $270 to the next iPhone Pro to preserve its current profit margin. The iPhone 17 Pro currently starts at $1,099.
The research firm estimated that Apple paid about $39 for the iPhone 17 Pro’s 12GB of DRAM, but that the same amount could cost $145 in its successor. The price of 256GB of flash storage could rise from about $13 to $51.
AI Data Centers Increase Competition for Chips
Technology companies are buying large quantities of advanced memory for AI data centers, reducing the supply available for phones, computers, and other consumer electronics. Major chipmakers have also prioritized high-margin components used in AI systems.
Cook previously warned that rising component prices could affect Apple’s financial performance. John Ternus, who will become Apple CEO on September 1 under the company’s leadership transition plan, raised similar concerns in April.
Apple is also increasing the use of on-device AI, which can require more memory to process models and user data locally. At its Worldwide Developers Conference in June, the company presented updates to Siri and other Apple Intelligence features.
The company agreed earlier this year to pay $250 million to settle claims that it advertised Siri capabilities that were not delivered as originally promoted. Apple denied wrongdoing, and the settlement did not include a finding of liability.
Featured image credits: iphonedigital via Flickr
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