Apple CEO Tim Cook warns price hikes are 'unavoidable' as AI boom drives memory chip shortage

The warning

Apple CEO Tim Cook told The Wall Street Journal on 17 June that price increases for the company's products are now unavoidable. "Unfortunately, price increases are unavoidable," Cook said. "We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers from the increases, but the situation has become unsustainable." Cook, who will hand over the CEO role to John Ternus in September, did not specify when the higher prices would take effect or which devices would be impacted.

Why memory chips are in short supply

The rapid expansion of AI data centres has created fierce competition for memory and storage chips, the same components used in smartphones, laptops and other consumer electronics. Cook noted that more supply is being allocated to high-bandwidth memory for AI servers, leaving less for consumer devices. "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," he said. Industry data shows memory chip prices have more than doubled since October 2025, with quarterly increases of at least 50 percent since late 2025. Cook described the situation as a "hundred-year flood", adding he had never seen such price surges in over 40 years in the electronics supply chain.

What products will be affected

While Cook did not name specific products, analysts expect the iPhone, iPad and Mac lines to bear the brunt. Apple has already taken steps to adjust its product mix: in March 2026 it withdrew the Mac Studio configuration with 512 GB of RAM, and later raised the starting price of the Mac Mini to €799, eliminating the previous €599 entry-level model. Analyst Tim Culpan suggested the base MacBook Neo configuration could also be dropped, leaving only the €699 model with 512 GB storage. The Wall Street Journal reported that Apple might need to increase the iPhone Pro price by $270 just to maintain its current profit margin.

Price estimates for the iPhone 18 Pro

The iPhone 18 Pro and Pro Max are expected to launch in September 2026, alongside Apple's first foldable iPhone. The standard iPhone 18 may be delayed until spring 2027, according to Bloomberg's Mark Gurman. Based on current component costs, the Wall Street Journal estimates the iPhone 18 Pro could start at $1,299 in the US, up from $1,099 for the iPhone 17 Pro. European pricing could reach €1,299, compared to €1,099 for the current model. Research firm Omdia forecasts the average smartphone price worldwide will rise about 20 percent in 2026, reaching a record high.

Apple's response and the road ahead

Cook said Apple is willing to use its cash reserves to help boost memory supply, though he ruled out building its own factories. "We're willing to use our balance sheet to help be a part of the solution," he said. "Obviously, more capacity is needed." Asked whether US restrictions on working with Chinese memory and storage companies should be eased, Cook replied: "Everything needs to be on the table. I think we should look at all supply." The memory crunch is also being compounded by the conflict in Iran, which has disrupted global helium supplies essential for semiconductor manufacturing.