Apple is preparing to raise prices across its product range as surging demand for memory and storage chips, fuelled by the artificial intelligence boom, pushes component costs to unsustainable levels, chief executive Tim Cook has confirmed.
Speaking in an interview with The Wall Street Journal, Cook said the company has been trying to absorb rising input costs but warned that the pressure has become too great to fully offset. “Unfortunately, price increases are unavoidable,” he said. “We’ve been doing our best to shield customers, but the situation has become unsustainable.”
Apple did not specify when higher prices would take effect or which products would be affected, though analysts expect changes could be introduced alongside the next iPhone cycle, due later this year. The company has already made quiet adjustments to pricing in some Mac models in recent months.
The underlying cause is a dramatic escalation in the cost of memory and storage chips, which are essential components in almost all modern electronics. Demand from AI data centres has surged, diverting supply away from consumer device manufacturers and tightening availability across the industry.
Research estimates suggest that maintaining current profit margins could require adding more than $200 to the cost of a high-end iPhone if costs are passed directly to consumers. Prices for key chip types, including DRAM and NAND, have reportedly multiplied several times over the past year as technology giants expand AI infrastructure spending.
DRAM functions as short-term working memory for devices, while NAND stores long-term data such as photos and apps. Both are now in short supply, with production increasingly prioritised for high-performance AI servers rather than smartphones, laptops, and other consumer electronics.
Cook said the imbalance has left the market under severe strain. “There’s less supply at a time when consumers want devices, and suppliers are passing on significant price increases,” he said. He added that stabilising memory supply is now critical for the broader technology ecosystem.
Industry dominance in memory manufacturing remains concentrated among a small group of firms in South Korea, the United States, and Japan. Their profits have risen sharply as chip prices climb, while production capacity continues to lag behind demand.
Analysts warn that even as new factories come online, AI-related consumption is expanding too quickly for supply to catch up. Forecasts suggest the shortage could persist for several years, with pressure particularly strong in advanced memory used for AI computing.
Apple is not alone in responding to the trend. Other electronics manufacturers, including PC and gaming companies, have already raised prices or adjusted product specifications to manage rising costs.
Cook said Apple is also exploring ways to secure more supply directly, including potential long-term agreements with suppliers. However, he acknowledged that competing with AI-focused technology firms for contracts is increasingly difficult due to their scale and aggressive prepayment deals.
The Apple chief described the current situation as unprecedented in his decades in the industry. “This is a hundred-year flood,” he said. “I’ve never seen anything like it.”
For consumers, the shift signals a broader reality: the cost of the AI revolution is no longer confined to data centres and laboratories, but is beginning to filter into everyday devices.
