This is called RAMageddon. AI’s insatiable demand for hardware has led to a global shortage of memory chips. Now, outgoing Apple CEO Tim Cook is warning customers that their next Mac, iPhone or iPad could cost more due to the surge in the cost of memory and storage chips.
In a recent interview, Cook told the WSJ that price increases are “inevitable” despite efforts to absorb chip costs, which have quadrupled from last year. He described the current situation as “unsustainable.”
Cook has previously warned of the impact of RAMageddon, although he did not say which products would be affected or when prices would rise. In April, after the company achieved record quarterly revenue, he said those higher costs could impact Apple’s next business results. New CEO John Ternus also warned about the problem that same month.
iPhones are almost certain to be affected if Apple raises prices, memory supply experts told the Financial Times. The company is expected to launch its next iPhone in September, which would be an opportunity to announce a price increase. Of course, Apple sells many other devices with memory (DRAM) and storage (NAND) chips, including the Apple Watch, Mac, iPad, and Apple Vision Pro.
It’s unclear how much more expensive these products will be, though research firm TechInsights provided estimates to the WSJ. Apple said it would need to add $270 to the next iPhone Pro to keep its profit margins intact. The iPhone 17 Pro starts at $1,099.
So far, AI has not been of particular benefit to Apple. Companies are already under pressure to figure out an AI strategy for their devices. It even paid a $250 million settlement earlier this year to end a false advertising lawsuit filed after it failed to deliver AI features it promised two years ago.
The company’s worldwide developer conference held earlier this month showed progress on delivering on previous AI promises, including an overhaul of Siri. Of course, as on-device processing increases, memory demand may also increase. This trend appears to ultimately lead to consumers paying more for Apple products.
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