Apple Says Price Increases Are 'Unavoidable' as Memory Costs Surge

Apple is done absorbing the cost of the memory inside its devices, and its customers are about to feel the difference. Chief executive Tim Cook told The Wall Street Journal on Wednesday that the company will raise prices to offset the soaring cost of memory and storage chips, ending months in which Apple had quietly swallowed the increases itself.

"Unfortunately, price increases are unavoidable," Cook said. "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."

The squeeze traces back to a single, voracious buyer: artificial intelligence. Data-center operators racing to build AI capacity have bid up the price of the same DRAM and storage chips that go into phones, tablets and laptops, leaving consumer-electronics makers fighting over what is left. Industry groups representing automakers, retailers and electronics firms warned earlier this month that the crunch could push up prices across US consumer goods and snarl supply chains.

For shoppers, the abstract shortage has already shown up on a price tag. Apple lifted the starting price of the Mac mini from $599 to $799 by dropping its cheapest configuration, a $200 jump on what had been the most affordable way into a desktop Mac.

Cook would not say which products are next, when the increases land, or how steep they will be. The timing is awkward. Apple is on track to release its first foldable iPhone in September alongside the iPhone 18 Pro and Pro Max, the kind of flagship launch where every extra dollar gets scrutinized down to the cent.

He was blunt about where the pressure starts. More memory is being funneled into the high-bandwidth chips that feed AI servers, draining what is left for consumer gadgets. There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases, Cook said. We definitely need memory pricing and supply to return to reasonable levels for consumer products. That's the bottom line.

Apple is not powerless here. Cook indicated the company is prepared to spend from its enormous cash reserves to shore up supply, We're willing to use our balance sheet to help be a part of the solution, he said, adding that obviously, more capacity is needed. What Apple will not do, he clarified, is build its own memory and storage factories.

The warning is not new, only louder. Cook had flagged the strain in May, telling CNBC the company would look at a range of options as costs climbed, language you can now read as the polite version of Wednesday's admission. The broader backdrop is a consumer who was already pulling back: even in China, the world's largest electronics market, retail spending recently fell for the first time since the pandemic. Higher sticker prices are landing on softer demand.

It is not only Apple feeling it. The same week, Snap put a $2,195 price on its newest wearable, a reminder that premium hardware is getting pricier across the board, not just in Cupertino.

The problem also lands on Cook's desk just as he prepares to clear it. He hands the chief executive role to hardware chief John Ternus in September, the same month the new iPhones arrive. The man who spent a career turning Apple's supply chain into the most profitable in technology is leaving his successor a bill that money alone cannot fully settle.