Apple Price Hikes 'Unavoidable' as AI Boom Drives Up Chip Costs, Says Outgoing CEO Cook
Apple will raise prices on its products, a necessity driven by the escalating cost of memory chips, its outgoing chief executive, Tim Cook, has stated. Speaking to the Wall Street Journal, Cook described the situation as 'unsustainable' and price increases as 'unavoidable'. He did not specify which products would be affected or when the hikes would occur, leaving the impact on the anticipated iPhone 18 launch in September unclear.
The burgeoning demand for artificial intelligence (AI) has significantly inflated memory chip prices in recent months. These components are fundamental to smart devices, including mobile phones. Adding to the pressure, the conflict in Iran has disrupted global helium supplies, a critical gas for semiconductor manufacturing, further increasing chip production costs.
US President Donald Trump later announced that Apple had agreed to collaborate with Intel on domestic chip manufacturing. Trump posted on Truth Social, stating his decision to assist Intel was based on the need to 'design and build our Chips right here in America'. The Trump administration had acquired a 10% stake in Intel in August last year, with Intel's shares subsequently rising over 10% upon Thursday's US market opening.
Cook, who will be succeeded by John Ternus in September after 15 years as CEO, told the WSJ, 'We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers from the increases, but the situation has become unsustainable.' He added, 'There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases.' RAM, typically a low-cost computer component, has seen its price more than double since October 2025.
Research firm Omdia projects the average global selling price of smartphones to rise by approximately 20% in 2026, reaching an unprecedented high. Omdia's smartphone market analyst, Chiew Le Xuan, indicated that new iPhone models could cost up to $150 more than the iPhone 17s due to anticipated upgrades supporting new AI features. Most other smartphone manufacturers have already implemented price increases, reduced promotions, or downgraded specifications to protect profit margins, a trend described as 'the new pricing reality, not a temporary spike.'
Other technology giants are also signalling pressure within the chipmaking sector. Taiwan Semiconductor Manufacturing Company (TSMC), a key manufacturer of advanced chips for Apple, Nvidia, and AMD, has not ruled out price increases. Earlier this year, Samsung forecast memory chip shortages would elevate the cost of electronic devices. Sony increased its PlayStation 5 console prices by £90 in the UK and $100 in the US due to 'continued pressures in the global economic landscape', with Nintendo also announcing a price hike for its Switch 2 from September.
