AI's relentless demand for hardware has triggered a global memory chip shortage, dubbed 'RAMageddon'. Outgoing Apple CEO Tim Cook now warns consumers that the next Mac, iPhone, or iPad could be more expensive due to surging memory and storage chip costs.
In a recent interview, Cook told the Wall Street Journal that price increases are 'unavoidable,' despite efforts to absorb chip costs that have quadrupled since last year. He described the situation as 'unsustainable.'
While Cook did not specify which products will be affected or when prices will rise, he has previously raised alarms about RAMageddon's impact. In April, after reporting record quarterly sales, he noted that these higher costs could affect Apple's next financial results. Incoming CEO John Ternus also warned about the issue that same month.
If Apple raises prices, the iPhone is almost certain to be impacted, according to memory supply experts speaking to the Financial Times. The company is expected to launch its next iPhone in September, providing an opportunity to announce increased prices. Apple sells many other devices containing memory (DRAM) and storage (NAND) chips, including the Apple Watch, Mac, iPad, and Apple Vision Pro.
It remains unclear how much more expensive these products will become, though research firm TechInsights provided an estimate to the WSJ. The firm suggested Apple would need to add $270 to the next iPhone Pro to maintain its profit margin. The iPhone 17 Pro currently starts at $1,099.
AI has yet to prove a significant boon for Apple. The company is under pressure to solidify its AI strategy for devices, and earlier this year paid a $250 million settlement to end a false advertising lawsuit after it failed to deliver promised AI features from two years prior.
Apple's Worldwide Developers Conference earlier this month showed progress on fulfilling those previous AI promises, including a major Siri overhaul. However, more on-device processing likely means greater memory requirements—a trajectory that seems destined to result in higher prices for consumers.
via TechCrunch