Apple CEO Tim Cook and Jalen Brunson, a basketball player for the New York Knicks, on the first day of in-store sales of the latest Apple products at Apple’s Fifth Avenue store in New York, September 19, 2025.
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Over the past few years, consumers have been flocking to chatbots and AI agents, taking advantage of new models of artificial intelligence that are changing the way we live and work. Now they are paying for it, but not in the way they might have expected.
The AI boom has led to an incessant demand for memory, creating a global shortage that is leading to price increases. That’s a big enough problem an apple finally he tells the buyers to be ready to open their wallets.
Apple CEO Tim Cook told the Wall Street Journal, in an interview published on Wednesday, that the company plans to increase the price of its products due to the ongoing memory shortage. He called the walkout “inevitable” and the state of memory “not permanent.”
“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 debt,” said Francisco Jeronimo, IDC analyst, in an interview.
AI chips, mostly made by Nvidiathey take all the memory and storage that few vendors can produce. Smartphone, PC, and other device makers must get in line, or pay extra for faster access. But Apple’s surprise disclosure, less than three months before Cook stepped down as CEO, underscores the widespread impact of the deficit. Until now, the iPhone maker has been considered largely immune to price increases due to its market power.
“It tells you the depth of the problem,” said Ranjit Atwal, an analyst at Gartner. “Even Apple can’t be safe, with all the technology and long-term planning and everything else. This is beyond their ability to limit the impact.”
Cook declined to say in an interview when the price increase would go into effect and for what makes and models. An Apple spokesperson declined to comment to CNBC.
Another possibility is that Apple will keep the price increase on its premium devices, such as the Pro-series phones, because high-end customers are likely to be able to absorb the hit. IDC’s Jeronimo expects Apple to raise the price of the $999 iPhone Pro and $1,199 iPhone Pro Max by $100, and leave the lower-end devices alone.
Analysts at BofA Securities, in a paper Thursday, agreed with that assessment, and said they expect price increases for most Mac and iPad models.
But there is another possible way, which involves taking advantage of this situation to capture more market share.
In recent months, Apple has been targeting budget-conscious consumers with the recent introduction of the $599 MacBook Neo and the $599 iPhone 16e. Some analysts expect Apple to benefit as Android device manufacturers lower specs or raise prices. Average smartphone prices are expected to increase by 20% this year, according to IDC.
“This could be an incredible opportunity when Apple says Android will face a real challenge with rising chip prices,” said Simon Bryant, an analyst at research firm CCS Insight. “And maybe Apple can really use this to squeeze a lot of market share from Android.”
Usually a price increase from Apple comes with new features. For example, the company raised the starting price of its Mac Mini desktop computer to $799 from $599 in May while adding storage.
With on-device AI, Apple currently packs more RAM into each phone. Improvements like the new Siri voice customization and summoning feature expected to be introduced this fall will be limited to a small number of new iPhones, iPads, and Macs because the older and less expensive ones can’t handle the memory-hungry options.
In the Journal interview, Cook talked about the types of memory that Apple needs, namely DRAM, which is used for short-term data storage, and NAND, which is often called a solid-state drive and is used for long-term data storage.
AI chips for data centers use high-bandwidth memory, which is faster and requires more power than smartphone memory. The single Nvidia Blackwell B200 chip has 192GB of high-bandwidth memory. Eight of them can fit into one server, and more than 2,000 servers can be organized into a single cluster.
The Apple iPhone, in contrast, comes with 8GB or 12GB of DRAM.
The problem is that it all requires production capacity from three main suppliers: MicronSK Hynix, and Samsung. When a supplier like Micron makes one unit of HBM memory, it has to stop making three units of standard smartphone memory, CNBC previously reported.
Memory suppliers are building new factories, called fabs, but much of the added capacity may still go to the more profitable HBM memory, and capacity is expected to take years to come online.
Cook told the Journal that Apple could use its cash reserves to help increase supply.
“We are willing to use our balance to help be part of the solution,” he said.
WATCH: Apple is changing pricing power as memory costs rise
