Apple to Hike Product Prices Amid Chip Cost Surge

Apple has announced it will raise the prices of its products as memory chip costs continue to climb, citing the AI boom and supply tightness that have turned chip costs into a significant pressure point.

Tim Cook, Apple's outgoing chief executive, told the Wall Street Journal that price increases were "unavoidable" as the situation around memory chips had become "unsustainable".

He did not specify when the price rises would take effect or which product lines would be affected. It remains unclear if the iPhone 18, slated for a September launch, will carry the hike.

Memory chips are a core component in mobile devices, but the surge in artificial intelligence demand has driven up their prices in recent months.

Apple said it has been working to shield customers from the price increases, but the devil has invoked cost pressures, adding that "there's less supply at a time when consumers want devices and the memory guys are passing along huge price increases."

The company is hoping for a return to reasonable memory pricing and supply levels, and will consider any price changes once the market stabilizes.

The price of RAM, typically one of the least expensive computer parts, has more than doubled since October 2025. Addition to this, the war in Iran has disrupted global helium supplies—crucial for semiconductor manufacturing—further inflating chip costs.

A report from Omdia predicts that global average smartphone prices will rise by around 20% in 2026, hitting an all‑time high.

Omdia analyst Chiew Le Xuan says Apple’s new phones may cost up to $150 more than the iPhone 17s as the firm upgrades specifications to support new AI features.

Most smartphone brands have already raised prices, reduced promotions, or cut specifications to protect profit margins in response to rising costs.

"This is the new pricing reality, not a temporary spike," said Cook.

Industry peers echo the pressure: Taiwan Semiconductor Manufacturing Company (TSMC) will not rule out a price increase, Samsung warned about memory chip shortages inflating device prices, Sony raised PS5 prices by £90 in the UK and $100 in the US, and Nintendo raised Switch 2 pricing from September.

The iPhone 17 remains popular, with sales of Apple devices up 17% in the first three months of 2026 compared with the same period a year ago, boosted by strong demand in China.

Apple removed the entry‑level option of its Mac Mini, raising the starting price by about $200 (£150) earlier this year.