The Cost of AI Comes to Consumers
Apple plans to raise prices on its products due to surging memory chip costs, outgoing CEO Tim Cook told the Wall Street Journal. Cook described the situation as “unsustainable,” noting that the company can no longer absorb the price increases passed along by memory chip suppliers. He did not specify which products would be affected or when the hikes would take effect, leaving uncertainty around the upcoming iPhone 18 expected in September.
The price of RAM, a standard computer component, has more than doubled since October 2025. This spike is driven by booming demand for artificial intelligence, which requires vast amounts of memory for training and running models. Additionally, the war in Iran has disrupted the global supply of helium, a gas essential for semiconductor manufacturing, further inflating chip costs.
Broader Industry Impact
Apple is not alone in facing these pressures. Research firm Omdia predicts the average selling price of smartphones globally will rise by about 20% in 2026 to an all-time high. Most smartphone brands have already raised prices, reduced promotions, or cut specifications to protect profit margins. Analysts expect Apple’s new phones could cost up to $150 more than the iPhone 17 line.
Other tech giants are also feeling the pinch. TSMC, the world’s largest chipmaker, has not ruled out price increases. Samsung earlier warned that memory chip shortages would make electronics more expensive. Sony raised PlayStation 5 prices by £90 in the UK and $100 in the US, while Nintendo plans to increase the Switch 2 price starting in September. Cook emphasized that “less supply” at a time of high consumer demand has created a pricing reality that appears here to stay.
