AI is hurting Apple in more ways than one: It could lead to higher iPhone prices

It’s been called RAMageddon: AI’s insatiable demand for hardware has caused a global shortage of memory chips. Now outgoing Apple CEO Tim Cook is warning his customers that your next Mac, iPhone or iPad could be more expensive thanks to rising costs of memory and storage chips.

In a recent interview, Cook told the Wall Street Journal that price increases are “inevitable,” despite efforts to absorb chip costs that have increased fourfold since last year. He described the situation as “unsustainable.”

Cook did not say which products would be affected or when prices would rise, but he has sounded the alarm about the effects of RAMageddon before. In April, after posting record quarterly sales, he said these higher costs could impact Apple’s next business results. New CEO John Ternos also warned of this problem in the same month.

If Apple raises prices, the iPhone will almost certainly be affected, memory supply experts told the Financial Times. The company is expected to launch its next iPhone next September, which gives it the opportunity to announce a price increase. Of course, Apple sells many other devices with DRAM and NAND storage chips, including the Apple Watch, Mac, iPad, and Apple Vision Pro.

It’s not clear how much any of these products will cost, though research firm TechInsights gave its estimates to the Wall Street Journal. She said Apple would need to add another $270 to the next iPhone Pro to keep its profit margin healthy. iPhone 17 Pro pricing starts at $1,099.

So far, artificial intelligence has not been a particular boon for Apple. The company is already under pressure to figure out its AI strategy for its devices. It even paid a $250 million settlement earlier this year to end a false advertising lawsuit that was filed after it failed to deliver the AI ​​features it promised two years ago.

The company’s Worldwide Developers Conference earlier this month showed progress in delivering on previous AI promises, including an overhaul of Siri. Of course, more on-device processing would mean more memory needed — a path that seems destined to end with consumers paying more for Apple products.