Outgoing Apple CEO Tim Cook has warned customers that the company may be forced to raise prices on its iPhones, Macs, and iPads due to a global shortage of memory chips driven by AI’s insatiable hardware demands — a situation the industry has dubbed “RAMageddon.”
In a recent interview with the Wall Street Journal, Cook said price increases are “unavoidable” despite the company’s efforts to absorb chip costs that have increased fourfold since last year. He described the situation as “unsustainable.” Cook did not specify which products will be affected or when prices will rise, but he has raised the alarm about the impacts of the chip shortage before. In April, after delivering record quarterly sales, he warned that higher costs could impact Apple’s next business results. Incoming CEO John Ternus also flagged the issue that same month.
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iPhone price hike seen as likely
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 provides an opportunity to announce increased prices. Apple sells many other devices that contain memory (DRAM) and storage (NAND) chips, including the Apple Watch, Mac, iPad, and Apple Vision Pro. It is 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.
AI has not been a boon for Apple
So far, AI has not been a particular boon for Apple. The company is already under pressure to figure out its AI strategy for its devices. It 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. More on-device processing could mean more need for memory — a trajectory that seems destined to end with consumers paying more for Apple products.
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Frequently Asked Questions
Why is Apple facing potential price increases?
Apple is facing higher costs for memory (DRAM) and storage (NAND) chips due to a global shortage caused by AI’s growing hardware demands, a situation some analysts call ‘RAMageddon.’
Which Apple products could become more expensive?
The iPhone, Mac, iPad, Apple Watch, and Apple Vision Pro all use memory and storage chips and could see price increases. The next iPhone, expected in September, is considered the most likely candidate.
How much more could the next iPhone cost?
Research firm TechInsights estimates Apple may need to add $270 to the next iPhone Pro to maintain its profit margin. The current iPhone 17 Pro starts at $1,099.
