Topline
Apple CEO Tim Cook said price hikes for the company’s popular products, including iPhones and iPads, were “unavoidable” due to the skyrocketing cost of memory caused by the AI boom, but did not say exactly when the company planned to raise prices.
Apple CEO Tim Cook told the Wall Street Journal the price crunch for memory and storage was creating an “unsustainable” situation for the company.
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Key Facts
In an interview with the Wall Street Journal on Wednesday, Cook said the company had been trying to “shield” consumers from price increases due to higher memory prices, but this has now become “unsustainable.”
Cook did not outline by how much prices would increase, but an analysis published by the Journal using projections from TechInsights found the iPhone 18 Pro could potentially see a $200 price hike—up to a $1,299 price tag for the model.
The Apple CEO also did not provide a timeline for when consumers could expect to see price increases, but the Journal reporter who worked on the story estimated in a post on LinkedIn this could happen as soon as before the Fall iPhone launch event—currently expected to take place on September 9.
Tangent
Prices for consumer electronic products like video game consoles and smartphones have been surging for months due to increased prices for memory chips. The price crunch is primarily caused by high demand for those chips by AI companies, which require massive amounts of memory to power servers in data centers.
Crucial Quote
“There’s less supply at a time when consumers want devices and the memory guys are passing along huge price increases,” Cook told the Journal on Wednesday, insisting that the company needed prices to settle at “reasonable levels for consumer products.”
Key Background
Apple already raised prices for its Macbook laptop offerings by as much as $400 in March. During Apple’s second quarter earnings call in April, Cook said the company was able to “partially offset” rising inventory cost during the first quarter of the year, but expected the price crunch would “drive an increasing impact on our business” starting in June.