Apple to raise prices as AI boom triggers soaring chip costs

Apple plans to increase the prices of its devices due to a sharp rise in the cost of memory chips, outgoing Chief Executive Tim Cook has confirmed.

Labelling the current supply chain pressures “unsustainable,” Cook indicated that the global artificial intelligence boom has squeezed component availability, making consumer price hikes unavoidable.

“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… but the situation has become unsustainable,” Cook told the Wall Street Journal.

“There’s less supply at a time when consumers want devices, and the memory guys are passing along huge price increases.”

The price of RAM has more than doubled since October 2025. This scarcity is intensified by high demand for AI data centres and global supply chain disruptions, including a shortage of helium – a gas that’s critical for semiconductor manufacturing.

Consequently, research firm Omdia forecasts that global smartphone prices will rise by an average of 20% in 2026. For Apple, analysts project the upcoming iPhone 18 lineup, expected this September, could see price increases of up to $150 compared to previous models.

An industry-wide “pricing reality”

Apple is not the only manufacturer adjusting to these macro-economic factors. Competitors across the tech and gaming landscapes, including Samsung, Sony, and Nintendo, have already raised prices on flagship hardware to protect profit margins.

“Apple isn’t alone here. The entire smartphone industry is caught in the same squeeze,” noted Ernest Doku, mobiles expert at Uswitch.

“AI data centre demand is driving fierce competition for memory chips, pushing up the cost of every handset. We’re already seeing the effects – Samsung’s Galaxy A57 launched £30 more than its predecessor earlier this year – and Apple’s iPhone 17 Pro costs £100 more than 2024’s model.”

Chiew Le Xuan, a smartphone market analyst at Omdia, added that most brands have already pulled back on promotions or altered specifications to manage expenses. “This is the new pricing reality, not a temporary spike,” he stated.

For consumers looking to avoid the immediate financial impact of the hardware market shift, experts recommend alternative options. “If you’re due an upgrade, the best protection is to shop around now, before new pricing feeds through to new deals and devices,” Doku advised.

“SIM-only plans and refurbished handsets are both worth considering for anyone who doesn’t want to foot the full bill for the AI arms race.”