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ZDNET’s key takeaways
- Apple CEO Tim Cook warns that product prices are likely to go up.
- Higher costs for memory chips are driving the change.
- The price of an iPhone Pro could jump by at least $200.
Planning to pick up a new iPhone or another Apple device be prepared to pay more than you did before. Speaking with The Wall Street Journal (subscription required), Apple CEO Tim Cook confirmed the company intends to raise prices across its lineup due to tighter supplies and steeper costs for memory and storage chips.
“Price hikes are unfortunately inevitable,” Cook shared with the WSJ. “We’re doing everything we can to soften the blow of the massive increases being handed down to us, and we’ve been working hard to protect our customers from rising costs, but the situation has reached a breaking point.”
Cook did not specify when the increases might take effect or which products would feel the impact. Apple typically unveils its annual wave of new products in September, featuring the latest iPhones (possibly including a foldable iPhone Ultra), an updated Apple Watch, and other fresh devices. The new pricing could easily debut at that event, though the WSJ suggested that Mac and iPad price bumps could hit even sooner.
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One product has already seen a price adjustment. Last month, Apple revised the starting price and specs for its most affordable Mac Mini. The base model previously cost $599 and shipped with an M4 chip, 16GB of RAM, and 256GB of storage. Now, the entry-level version runs $799 with the same processor and memory but doubles the storage to 512GB.
What’s behind the price increase?
The root cause is surging AI demand and the strain it’s placing on the memory and storage chip industry.
AI firms have been snapping up large portions of the available DRAM (dynamic random access memory) and NAND flash storage supply to power their resource-intensive systems. This has created a serious chip shortage for other manufacturers, pushing up prices for whatever stock remains.
The three leading memory producers (Samsung Electronics, SK Hynix, and Micron Technology) have also redirected their limited capacity and investment toward higher-margin enterprise products, leaving far less for the consumer electronics market.
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Apple typically locks in enough memory supply to cover one to two years ahead of time. But as those reserves run low, the company has no choice but to pass the added costs along to shoppers, or risk seeing its profit margins shrink.
With Apple doubling down on its AI-driven Siri and Apple Intelligence features, iPhones and other devices now require significantly more memory to handle the intensive AI workloads. Running the full suite of AI capabilities on an iPhone — spanning both on-device and cloud-based models — demands an iPhone 17 Pro, Pro Max, or iPhone Air, all equipped with 12GB of RAM.
“Supply is shrinking at a time when consumer demand is strong, and memory suppliers are passing along steep price hikes,” Cook told the WSJ. “We absolutely need memory pricing and availability to get back to reasonable levels for consumer products. That’s the bottom line.”
How much more might a new iPhone cost?
That varies based on the specific device, its configuration, and how much memory and storage it includes.
Analysts at the tech research firm TechInsights project at least a $200 rise in the retail price of an iPhone Pro, factoring in Apple’s costs and profit margins, according to the WSJ and confirmed by ZDNET.
Here’s the breakdown.
The iPhone 17 Pro ships with 12GB of DRAM and at least 256GB of flash storage. By this fall, the prices for these components could be four times what they were a year ago, forecasts Mike Howard, director of memory markets at TechInsights.
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For the 17 Pro, Apple currently pays roughly $39 for the 12GB of DRAM and about $13 for the 256GB of storage. This year, that DRAM cost could surge to $145, while the storage cost could climb to $51.
When accounting for both DRAM and storage, Wayne Lam, service director of wireless components at TechInsights, estimates Apple’s total cost for iPhone 17 Pro parts and assembly sits around $582. For the iPhone 18 Pro, that figure could leap 25% to $726.
To preserve a profit margin that TechInsights pegs at roughly 47%, Apple would need to charge iPhone 18 Pro buyers $1,371. Since the company favors round pricing, it would likely set the price at a minimum of $1,399. If these projections hold, that would mark a $200 increase over the $1,099 currently asked for the iPhone 17 Pro.
Apple has historically tried to keep prices steady from one iPhone generation to the next to encourage upgrades. But with the chip market under such intense pressure, the company appears to have little option but to break from that pattern this year.
