Apple warns of potential price hikes due to memory chip shortages

Apple’s outgoing CEO Tim Cook has warned that price increases for the company’s hardware products are “unavoidable” due to a worldwide shortage of memory chips. This shortage, often referred to as “RAMageddon,” has driven chip costs up fourfold since last year. In an interview with the WSJ, Cook described the current supply situation as unsustainable, indicating that Apple is struggling to absorb these surging expenses. The warning follows previous cost concerns raised in April by both Cook and incoming CEO John Ternus, who noted that higher component costs could impact Apple’s upcoming business results.

While Apple has not confirmed which specific products will be affected, memory supply experts consulted by the Financial Times suggest that the iPhone is highly likely to face impacts. The company is expected to launch its next iPhone in September, which could serve as the window for introducing higher prices. Other devices containing memory (DRAM) and storage (NAND) technologies—such as the Mac, iPad, Apple Watch, and Apple Vision Pro—could also see adjustments. To keep its profit margins intact, research firm TechInsights provided an estimate to the WSJ indicating that Apple would need to add $270 to the price of the next iPhone Pro. For context, the current iPhone 17 Pro starts at $1,099.

These hardware cost pressures arrive as Apple navigates other challenges related to its artificial intelligence strategy. Earlier this year, the company paid a $250 million settlement to resolve a false advertising lawsuit. The lawsuit was filed after Apple failed to deliver AI features it had promised two years ago. While the company’s recent Worldwide Developers Conference showed progress on these commitments, including an overhaul of its virtual assistant Siri, the shift toward more on-device processing is expected to increase the demand for memory and storage chips, potentially passing those costs directly to consumers.

Why it matters

Apple’s struggle highlights how the AI hardware boom is creating a supply crunch that forces even the most profitable tech giants to pass costs to consumers, potentially reshaping the economics of flagship devices.