SUMMARYApple CEO Tim Cook said the company must raise prices because soaring memory and storage costs have become unsustainable. Demand from AI firms has tightened chip supply, and the Wall Street Journal said Apple may need substantial increases to preserve margins, with TechInsights estimating the iPhone 18 Pro could cost about $270 more. Apple plans to use cash to improve memory supply but does not intend to build its own chip factories.
An anonymous reader quotes a report from MacRumors: Apple is raising its prices to offset the high cost of memory and storage, CEO Tim Cook told The Wall Street Journal. Apple is no longer able to absorb the increased prices and will need to pass some of the cost on to consumers. "Unfortunately, price increases are unavoidable," said Cook. "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."
Growing demand for memory and storage chips from AI companies has led to chip shortages and higher costs. The Wall Street Journal suggests Apple will need to increase device costs "substantially" to maintain its current profit margins given the cost of memory chips and SSDs. Research firm TechInsights claims Apple will need to make the iPhone 18 Pro around $270 more expensive to keep its existing profit margin.
Apple is struggling more with memory chips, but storage chips are also an issue. "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," Cook told The Wall Street Journal. Cook said Apple will use its cash to increase memory supply, but he did not give details on what that means. Apple does not plan to create its own memory and storage factories. "We can't do everything," Cook said. "We know what we're good at." Cook likened the memory shortages to a hundred-year flood. "I've never seen anything like it in any area in over 40 years," he said.
Further reading: Smartphone Market To Shrink 15% This Year Due To Memory Crisis