Memory chip costs quadruple due to AI demand, forcing Apple to pass $270 price increase to iPhone Pro buyers, per estimates.
Apple will increase iPhone prices as memory chip shortages driven by AI demand quadruple costs, CEO Tim Cook said. The move adds inflationary pressure to consumer electronics, with Morgan Stanley forecasting a 15% supply shortfall by 2027.
Memory chip makers like Micron and SK Hynix have seen shares surge 800% to 4,600% over the past year. TechInsights estimates the cost increase could add $270 to the next iPhone Pro, though Apple’s supply deals may limit margin erosion.
The price hike risks political scrutiny as smartphones carry limited CPI weighting but contribute to sticky goods inflation. AI hyperscalers’ long-term prepayment deals further tighten supply for consumer tech.