Apple announced plans to increase prices on its products as memory and storage chip costs climb sharply due to rising demand from artificial intelligence (AI) technologies. Tim Cook, Apple's outgoing CEO, called the price hikes "unavoidable" and described the current chip cost situation as "unsustainable" [1, 2, 3].

The boom in AI has pushed prices up for memory components like DRAM, NAND flash, and high-bandwidth memory (HBM). This surge has reduced chip availability for consumer devices, impacting Apple's supply chain and costs [1, 4, 5]. Cook said demand and price volatility in the chip market are extraordinary, calling it a "once-in-a-century flood" in his 40-plus years in electronics supply chains [3].

Apple spends hundreds of billions annually on memory and storage chips and had historically negotiated low prices. The AI-driven shift in supply dynamics now forces the company to accept higher costs that it cannot fully absorb [4, 6]. Despite this, Cook emphasized Apple will not build its own memory or storage chip plants but is willing to use its cash reserves to support increased chip production capacity [2, 3].

The company already raised the Mac Mini's starting price from $599 to $799 earlier in 2026 after discontinuing cheaper configurations [4, 7, 8]. Industry analysts forecast a 20% rise in average global smartphone prices this year, reaching historic highs [1, 7]. Omdia analyst Chiew Le Xuan estimated the upcoming iPhone 18, expected in September 2026, could cost up to $150 more than the iPhone 17 due to upgraded AI features and chip cost pressures [1, 7].

The iPhone 17, launched in September 2025, has driven a 17% year-over-year sales increase for Apple devices in Q1 2026 [1, 9]. However, it remains unclear when or exactly how much Apple will raise prices across its product line. The iPhone 18 launch is seen as the likely first major product cycle affected by the cost pressures [1, 3].

Other major smartphone makers such as Samsung and Xiaomi have also raised prices or trimmed specifications in response to rising chip costs [4, 9]. Additionally, global semiconductor manufacturing faces further supply constraints due to a disrupted helium supply caused by the war in Iran, which adds to chip production costs [1, 7].

Apple declined to comment on potential cooperation with Chinese memory chip suppliers amid US national security rules but acknowledged all options need consideration [2, 3].

As Tim Cook prepares to hand over the CEO role to John Ternus in September 2026, Apple continues managing these chip supply challenges while planning for the iPhone 18 launch set for the same month [1, 9].