Apple CEO Tim Cook said in an interview with The Wall Street Journal on the 17th (local time) that “price increases are inevitable,” signaling that the company will raise prices on the iPhone and other products. The reason is the sharp rise in memory semiconductor prices.
The iPhone price is going up. Apple, which has generally absorbed component price increases whenever possible, has finally shifted course toward raising consumer prices.
Apple CEO Tim Cook said in an interview with The Wall Street Journal on the 17th (local time) that “price increases are inevitable.” He added, “We have tried to reduce rising costs and protect consumers, but it has reached a level that is difficult to bear.” He did not mention the timing, size, or target products for the increase. With Cook set to hand over the CEO post to John Ternus in September, he is effectively formalizing a price increase just before leaving.
◆ Memory “sucked up by AI” has jumped fourfold in a year
The main culprit behind the price hike is memory semiconductors. The prices of DRAM, which temporarily stores data, and NAND flash, which stores data long term, have risen about four times since last year.
The cause is artificial intelligence. Big tech companies such as Google, Microsoft, Meta, and Amazon are pouring huge amounts of money into AI data centers and vacuuming up memory chips. Memory makers are prioritizing production lines for high-bandwidth memory (HBM) used in profitable AI servers, while memory for consumer devices such as smartphones is being pushed down the queue. Demand is exploding while supply is shrinking.
Cook likened the situation to “a flood that comes once in a hundred years.” He said, “In more than 40 years working in the IT supply chain, I have never seen such a surge in prices and shortage of supply in any field.” Ironically, this boom is creating major earnings opportunities for Korean companies such as Samsung Electronics and SK hynix, which make memory chips.
◆ iPhone 18 Pro could be $200 more expensive
The first products expected to see price increases are the foldable iPhone and the iPhone 18 series, which are slated for release in September. Macs and iPads may also be adjusted earlier. Apple already raised the starting price of the Mac mini last month from $599 (about 900,000 won) to $799 (about 1.21 million won).
A clue to the size of the increase comes from component costs. According to market research firm TechInsights, the 12GB DRAM and 256GB NAND used in the iPhone 17 Pro cost $39 and $13, respectively. But in the iPhone 18 Pro, those same components could rise to $145 and $51. That means memory alone would become three to four times more expensive.
As a result, the iPhone Pro’s component and manufacturing costs are expected to rise about 25%, from $582 to $726. If Apple wants to keep its current 47% profit margin, the selling price would need to rise to $1,371 (about 2.07 million won).
The Wall Street Journal said that, considering Apple’s pricing strategy, the starting price of the iPhone 18 Pro could be set at $1,299 (about 1.96 million won). That is $200 (about 300,000 won), or about 18%, more than the current iPhone 17 Pro starting price of $1,099 (about 1.66 million won).
◆ As AI devices use more memory, the price hike shows no sign of ending
TechInsights expects memory prices to keep rising through 2027. Investment bank Morgan Stanley projected that smartphone and PC prices in the United States will rise by about 15% this year.
For Apple, there is little room to escape. That is because adding AI functions requires packing more memory into devices. To run the new Siri AI voice assistant, the iPhone 18 will carry 12GB of memory. AI is driving memory prices higher while also demanding more memory, creating a double burden.
Apple is not the only company raising prices. Samsung, Microsoft, Sony, and Dell have already increased product prices. Apple is considering using cash to secure supply, but has made clear that it will not build its own memory plants. Cook said, “We can’t do everything ourselves.”
The bill created by the AI boom is reaching beyond data centers and into consumers’ wallets. No one can say for sure whether prices, once raised, will return to previous levels after the memory supply shortage eases.
