Apple to Increase Prices on Some Products Due to Soaring Chip Costs

Outgoing Apple CEO Tim Cook has said Apple will raise prices on some of its products as soaring memory-chip costs driven by the artificial intelligence boom become increasingly difficult to absorb.

In an interview with The Wall Street Journal published on Wednesday, Cook said higher costs made price increases "unavoidable", signalling that consumers could soon pay more for Apple devices.

The warning comes as demand for memory chips has surged alongside the rapid expansion of artificial intelligence infrastructure and data centres. Memory components are essential for both AI systems and consumer electronics, including smartphones, laptops and tablets.

According to a recent Morgan Stanley estimate, memory-chip prices have risen more than sixfold over the past year as manufacturers struggle to keep pace with demand.

Cook's comments may also point to wider price pressures across the technology industry.

The investment bank estimates that, if manufacturers were to offset higher memory costs entirely through pricing, average selling prices would need to rise by around 34% for smartphones, 67% for personal computers, 83% for servers and 14% for storage products. The figures illustrate the scale of cost pressures facing technology companies rather than forecasts of actual retail price increases.

"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 told the newspaper.

Cook is due to be succeeded by John Ternus in September after 15 years as Apple's chief executive.

The Wall Street Journal reported that the AI boom has transformed the memory-chip market, leaving Apple competing directly with major AI companies and data-centre operators for supply. As a result, the company has less leverage to negotiate lower prices with chipmakers.

Apple has not disclosed which products could become more expensive or how large any price increases might be.

Potential price increases could affect Apple's flagship consumer products, including iPhones, Mac computers and iPads, although the company has not indicated whether any specific devices will be targeted.

The Wall Street Journal cited estimates from research firm TechInsights suggesting that memory and storage components in the iPhone 18 Pro could cost Apple about $196, up from roughly $52 in the iPhone 17 Pro, reflecting the sharp rise in DRAM chips used for short-term memory and NAND flash chips used for permanent data storage.

Apple's next major product launch is expected in September, when the company is widely anticipated to unveil the iPhone 18 range.