Brace Yourself for Higher Prices of iPhones and Macbooks

You should expect your next iPhone or MacBook to cost more as the global chip shortage enters a new phase driven by the explosive growth of artificial intelligence. The memory crunch powering the AI race is forcing technology companies to compete for limited semiconductor capacity, and even Apple, with its unmatched purchasing power and supply-chain influence, is warning that higher prices may be unavoidable. As manufacturers redirect resources toward the high-value memory needed for AI systems, the devices consumers rely on every day are becoming the latest casualty of a technology boom that is reshaping the economics of electronics.

Apple has spent decades building one of the world’s most powerful supply chains, using its enormous purchasing power to secure components, negotiate prices and shield consumers from market shocks. But the artificial intelligence boom has created a shortage so severe that even the iPhone maker is warning customers they may soon have to pay more.

The company’s chief executive, Tim Cook, said this week that higher prices on Apple products were likely because of soaring memory costs, calling the increases “unavoidable” and describing the current memory supply situation as “unsustainable.” The disclosure marked a rare moment when Apple’s famed ability to control costs collided with a technology bottleneck it cannot easily overcome.

“It tells you the depth of the problem,” said Ranjit Atwal, an analyst at Gartner. “Even Apple can’t be safe, as much as they have all the expertise and long-term planning, and everything else. This is beyond their capacity to limit the impact.”

The crisis is being driven by the explosive growth of artificial intelligence, which has created extraordinary demand for advanced memory used in data-centre chips powering systems from companies such as Nvidia. AI infrastructure providers are consuming much of the available production capacity from the world’s leading memory manufacturers, leaving smartphone, personal computer and electronics companies competing for supplies.

“The world is being disrupted by AI and, at the same time, even before we start reaping the benefits of AI in our devices, we are already paying the bill,” said Francisco Jeronimo, an analyst at IDC.

For years, Apple has been considered relatively protected from inflationary pressures because of its scale, cash reserves and ability to secure components ahead of rivals. The company’s admission that memory costs are forcing potential price increases highlights how the AI-driven supply crunch is spreading beyond data centres and into everyday consumer technology.

Cook did not specify when price increases would begin or which products would be affected. Apple declined to comment.

Analysts expect Apple may focus increases on its premium products, where consumers are more likely to absorb higher costs. IDC’s Jeronimo expects the company could raise the price of the $999 iPhone Pro and the $1,199 iPhone Pro Max by $100 while leaving lower-priced models unchanged.

Analysts at BofA Securities also expect price increases across much of Apple’s Mac and iPad lineup.

But the shortage could also create an opportunity for Apple. As Android manufacturers face higher component costs, the company could use its stronger margins and brand loyalty to gain market share.

“This could be an amazing opportunity where Apple could say Android is going to face a real challenge with the price of chip increases,” said Simon Bryant, an analyst at research firm CCS Insight. “And maybe Apple could really use this to squeeze a lot of market share from Android.”

The global smartphone market is already expected to face higher costs. Average smartphone prices are projected to rise by 20% this year, according to IDC.

The memory shortage is particularly complicated because the same companies producing advanced AI memory also manufacture conventional chips used in consumer devices. The three dominant suppliers, Micron, SK Hynix and Samsung, are racing to expand capacity, but new semiconductor factories can take years to build and companies are prioritising the more profitable AI-related memory segment.

AI systems rely heavily on high-bandwidth memory, a faster and more power-intensive technology used in advanced processors. One Nvidia Blackwell B200 chip contains 192GB of high-bandwidth memory, while a single server can contain eight such chips and thousands of servers can be linked into a single computing cluster.

An iPhone, by comparison, typically uses between 8GB and 12GB of DRAM memory.

The competition for capacity has created difficult choices for manufacturers. When suppliers allocate more production to AI-focused memory, fewer resources are available for conventional smartphone and consumer electronics memory.

Apple itself is increasingly dependent on memory upgrades as it develops more artificial intelligence features for its devices. The company is adding more RAM to newer products to support AI capabilities, including expected improvements to Siri and other on-device functions.

Some features will only work on newer iPhones, iPads and Macs because older and cheaper devices lack the memory capacity required.

Cook said Apple was prepared to use its financial strength to help address supply constraints.

“We’re willing to use our balance sheet to help be a part of the solution,” he said.

The memory crunch illustrates an emerging reality of the AI race: the companies building the future of computing are competing not only for algorithms and talent, but also for the physical components required to run them. For consumers, the cost of that race may soon appear not as a new subscription fee, but as a higher price tag on the devices in their hands.

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