Apple CEO Tim Cook has warned that the company anticipates significantly higher memory costs, which will likely lead to price increases for iPhones and other products. While the impact was minimal in the December quarter and partially offset by existing inventory in the March quarter, the June quarter is expected to see a greater effect. Cook stated that beyond June, memory costs will have an increasing impact on Apple's business, and the company is evaluating a "range of options" to address this, a phrase often signaling potential price hikes.
The global memory chip crunch, partly driven by high demand for AI memory, is causing significant challenges for tech companies. Memory costs for Apple have reportedly surged from approximately $30 per 12GB module in early 2025 to $70 by December 2025. This increase is exacerbated by some suppliers like SK Hynix and Micron shifting focus to high-bandwidth memory (HBM) for AI, leaving Apple more reliant on Samsung.
Analysts believe Apple may strategically raise prices on higher-end models, such as the iPhone Pro Max, while keeping the base model prices stable to maintain market share. Gil Luria, an analyst at D.A. Davidson, suggested options for Apple include reducing memory in products, increasing handset prices, or accepting lower gross margins. William Kerwin of Morningstar noted that Apple could also pursue longer-term supply agreements to secure better pricing, similar to agreements discussed by memory maker SanDisk. Others predict that if Apple does raise prices, it will set a precedent for other smartphone manufacturers to follow.
