Tim Cook Warns Device Prices Will Rise as Memory Costs Climb Sixfold
AAPL•Outgoing CEO Tim Cook said Apple must raise device prices as memory-chip costs have climbed sixfold in one year driven by AI demand. Morgan Stanley estimates offsetting memory costs would require raising smartphone prices 34%, PC prices 67%, server prices 83% and storage prices 14%.
1. CEO Remarks on Pricing
Outgoing CEO Tim Cook said Apple must raise prices on some devices because rising memory-chip costs have made current pricing unsustainable. He emphasized efforts to shield customers but warned that absorbing higher component costs is no longer viable.
2. Surge in Memory-Chip Costs
Memory-chip prices have climbed sixfold over the past year as demand from artificial intelligence infrastructure and data centers outstrips supply. Apple now competes directly with major AI and cloud operators for critical DRAM and NAND components.
3. Estimated Price Increase Impact
Analysts at Morgan Stanley estimate that fully offsetting higher memory costs would require average smartphone prices to rise 34%, PC prices 67%, server prices 83% and storage prices 14%, illustrating the scale of potential consumer price adjustments.
