Apple CEO Tim Cook warned on June 17 that the company will raise prices on its products to offset surging memory and storage chip costs, calling the shortage a “hundred-year flood” driven by artificial intelligence demand. The announcement marks an unusual public acknowledgment from Apple of cost pressures that will force consumers to pay more for iPhones, MacBooks, and iPads later this year.
Cook told The Wall Street Journal that price increases are “unavoidable” as memory suppliers sharply raise their prices. The shortage is already squeezing Apple’s margins; the company’s gross margins declined two percentage points to 38.7% in the second quarter, “driven by a seasonal loss of leverage and higher memory costs,” according to CFO Kevan Parekh.
Research firm TechInsights estimates the impact vividly: Apple paid about $39 for the 12GB of DRAM in the iPhone 17 Pro, but that same memory could cost $145 in the iPhone 18 Pro—a 272 percent increase. Analysts project the iPhone 18 Pro could start at $1,299, a $200 jump from current pricing, according to Wall Street Journal analysis.
Why AI Is Reshaping the Memory Market
The root cause is an unprecedented shift in chip demand. Artificial intelligence data centers are expected to consume approximately 70 percent of all memory chips produced globally in 2026, according to Everstream Analytics and industry analysts. This diverts DRAM and NAND supplies away from consumer electronics manufacturers like Apple, pushing prices higher across the entire market.
Data center demand for DRAM surged to around 50 percent of global consumption in 2025, up sharply from 32 percent five years earlier, according to Bloomberg analysis. As AI companies race to build out infrastructure, memory manufacturers prioritize high-margin data center sales over consumer products, tightening supply and driving up costs for everyone else.
The shortage is expected to persist through 2027, according to industry analysts, meaning Apple and its competitors will face sustained cost pressure. When comparable pressures hit the industry in the past—such as the semiconductor shortages of 2021–2022—companies absorbed some costs while passing others to consumers, typically through price increases on premium models first.
Apple has already begun adjusting its lineup. The company raised MacBook and iPad prices by up to $300 due to memory crunch earlier this year. In March, Apple launched the MacBook Neo at $599, sacrificing margins on that entry-level model while signaling that higher-end products will bear the cost increases. MacRumors reported in May that Apple is considering dropping the base $599 MacBook Neo configuration as component costs climb, potentially pushing buyers toward pricier tiers.
Cook’s public warning is unusual for Apple, which typically avoids discussing cost pressures in detail. The statement signals that the company expects the squeeze to continue and wants customers and investors prepared for price action across its product portfolio.
Sources
- Wall Street Journal — Tim Cook’s exclusive interview on price increases being “unavoidable” due to memory costs; TechInsights analysis of DRAM cost trajectory from iPhone 17 Pro to iPhone 18 Pro
- Reuters — Apple’s plan to raise prices on products to offset increasing memory and storage chip costs
- BBC — Apple’s price increases and memory chip shortage context
- ABC News — Tim Cook’s “hundred-year flood” quote and price increase warning
- Everstream Analytics — 70% of memory chips produced globally in 2026 destined for AI data centers
- Bloomberg — Data center DRAM consumption rising from 32% to 50% of global supply
- MacRumors — Apple’s MacBook mini price increase from $599 to $799; MacBook Neo configuration changes
- Apple Newsroom — MacBook Neo launch at $599 in March 2026
