Apple CEO Tim Cook and New York Knicks basketball player Jalen Brunson attend the first day of in-store sales of Apple’s latest products on Fifth Avenue, New York, September 19, 2025.
Bloomberg | Bloomberg | Getty Images
In recent years, consumers have flocked to AI chatbots and agents, leveraging powerful new artificial intelligence models that are transforming the way we live and work. They are now paying the price, but perhaps not in the way they expected.
The AI boom has created an unlimited demand for memory, leading to global shortages and rising prices. that’s a big enough problem apple It’s finally telling consumers to get ready to open their wallets.
Apple CEO Tim Cook told the Wall Street Journal in an interview published Wednesday that the company plans to raise prices on its products as memory shortages continue. He said the hike was “inevitable” and the situation in memory was “unsustainable.”
“The world is being disrupted by AI, and at the same time, we’re already paying the price before we even start reaping the benefits of AI in our devices,” IDC analyst Francisco Geronimo said in an interview.
The main manufacturers of AI chips are Nvidiahogging all the memory and storage that a few vendors can produce. Smartphone, PC, and other device manufacturers will have to wait in line or pay extra for quick access. But Apple’s surprising disclosure, less than three months before Cook stepped down as CEO, highlights the far-reaching impact of the shortage. So far, the iPhone maker has been seen as particularly insulated from price increases because of its market power.
“It speaks to the depth of the problem,” Gartner analyst Ranjit Atwal said. “Even Apple, with all its expertise and long-term planning and everything else, is not safe. This is beyond their ability to limit the impact.”
In an interview, Cook did not say when the price increase would take effect or for which devices or models. An Apple spokesperson declined to comment to CNBC.
One possibility is that Apple will hold off on price increases for premium devices such as Pro series phones, as high-end customers are likely to be able to absorb the impact. IDC’s Geronimo expects Apple to raise the prices of the $999 iPhone Pro and $1,199 iPhone Pro Max by $100, leaving lower-end devices alone.
Analysts at BofA Securities agreed with this assessment in a note Thursday, saying they also expected price increases for most Mac and iPad models.
However, another approach could be to take advantage of this situation to gain more market share.
Apple has targeted budget-conscious consumers in recent months with the $599 MacBook Neo and $599 iPhone 16e. Some analysts predict that Apple could benefit from Android phone makers lowering specs or raising prices. According to IDC, the average price of smartphones is expected to rise by 20% this year.
“This could be a great opportunity for Apple to say Android faces a big challenge with rising chip prices,” said Simon Bryant, an analyst at research firm CCS Insight. “And maybe Apple can use this to take a lot of market share away from Android.”
Price increases from Apple usually come with new features. For example, the company increased the starting price of its Mac Mini desktop computer from $599 in May to $799 while adding storage.
For on-device AI, Apple is now putting more RAM into each phone. Upgrades such as new custom Siri voices and dictation features scheduled to be released this fall will be limited to a small number of new iPhones, iPads, and Macs. This is because older, cheaper ones cannot handle memory-intensive options.
In an interview with the Journal, Cook talked about the type of memory Apple needs: DRAM, which is used for short-term data storage, and NAND (often referred to as solid-state drives), which is used for long-term data storage.
AI chips for data centers use high-bandwidth memory, which is faster and requires more power than smartphone memory. One Nvidia Blackwell B200 chip has 192GB of high-bandwidth memory. Eight of them can be placed on a single server, and more than 2,000 servers can be placed on a single cluster.
In contrast, Apple iPhones come with either 8GB or 12GB of DRAM.
The problem is that all of them require the production capacity of three major suppliers: micronSK Hynix, Samsung. For every unit of HBM memory that a supplier like Micron produces, it has to refrain from producing three units of traditional smartphone memory, CNBC previously reported.
Memory suppliers are building new factories, called fabs, but much of the additional capacity will still likely be allocated to more profitable HBM memory, which is expected to take several years to bring into production.
Cook told the Journal that Apple could use its cash reserves to expand supply.
“We want to use our balance sheet to be part of the solution,” he said.
Attention: As memory prices soar, Apple flexibly changes pricing authority
