According to reports on Wednesday, Apple (AAPL.US) CEO Tim Cook indicated in an interview that the company will increase prices on some products to counter the persistent rise in memory and storage chip costs. Cook did not specify which product lines would be affected, nor did he provide details on the potential size of the price hikes or a clear timeline for their implementation.
However, the market widely expects Apple to unveil its next-generation product lineup this September, which will include the iPhone 18 series featuring a long-anticipated foldable model. Reports suggest that price increases for products like the Mac and iPad may arrive even sooner.
The outgoing CEO acknowledged in the interview that raising prices is a necessary measure. He added, "We are doing our utmost to absorb the substantial cost increases passed on by our suppliers and have previously tried to shield consumers from this pressure, but it has become unsustainable to continue doing so."
The explosive growth in demand for memory and storage chips from artificial intelligence companies is significantly driving up upstream costs, which may compel Apple to substantially raise the retail prices of its devices to maintain its profit margins. Research firm TechInsights estimates that the manufacturing cost for the next-generation iPhone Pro could increase by approximately $270 as a result.
If Apple chooses to fully pass on these costs to consumers, the price of a fully-specced iPhone could surpass a predicted threshold for the first time, further raising the price ceiling for premium models.
Simultaneously, given that hardware gross margins remain a crucial pillar of Apple's overall profits amid a slowdown in the growth of its services business, price hikes have become an almost inevitable choice for maintaining financial health. As of the latest reports, Apple has not commented on specific pricing plans, but Wall Street analysts generally believe this round of adjustments will "trickle down from high-end to mid- and low-end models" and may be implemented in phases throughout the year.
Apple is not an isolated case. Since the second half of 2025, a wave of storage chip price increases triggered by AI demand has swept the globe, affecting all major smartphone manufacturers, including Samsung. The root of this cost pressure lies in the "siphon effect" that AI companies are having on the memory chip market.
With explosive growth in demand for large model training and inference, production capacity for HBM (High Bandwidth Memory) and high-end NAND flash is being heavily locked in by AI chip manufacturers. This is causing a tightening of supply for storage chips used in traditional consumer electronics, pushing prices higher.
As one of the world's largest purchasers of memory chips, Apple possesses strong bargaining power. However, the continuous upward pressure on upstream costs is impacting its ability to absorb these expenses without affecting profitability. An AI server's demand for DRAM and NAND is approximately 8 times and 3 times that of a standard server, respectively.
Server manufacturers are willing to pay over 30% more than smartphone makers for the same memory products, leading to a sustained squeeze on the supply of storage chips destined for consumer electronics.
Furthermore, the expansion of production capacity involves a lengthy cycle. The process from acquiring new equipment to achieving mass production typically requires 18 to 24 months. Even if new capacity construction began in the second half of 2025, effective supply would not materialize until 2027, making it difficult to fill the supply gap in the short term.
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