Apple warns higher memory costs could lift iPhone prices

Apple CEO Tim Cook warned rising memory and storage costs tied to AI-driven chip demand could force price increases on iPhones, Macs and other devices. He said Apple has tried to absorb higher component costs but can no longer do so fully, adding: “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.” Cook also noted concerns about supply: “There’s less supply at a time when consumers want devices and the memory guys are passing along huge price increases. We definitely need memory pricing and supply to return to reasonable levels for consumer products. That’s the bottom line.”

Market research firm TrendForce estimates DRAM costs for high-end smartphones could rise as much as 83% this quarter versus the prior period, driven by increased demand for memory and storage in devices with AI features. Hardware makers including HP, Dell, Sony and Nintendo have already raised retail prices after higher component costs.

BofA Securities maintained a Buy rating on Apple and raised its price target to $380. The bank added $100 to its iPhone Pro and Pro Max pricing assumptions on top of an earlier $100, bringing the expected premium on high-end models to $200; base model price assumptions were left unchanged. BofA also increased expected prices for Mac and iPad while trimming its demand forecasts slightly. The firm projects about a 100 basis-point gross margin headwind in Apple’s products division, partially offset by supply-chain efficiencies and materials improvements, and sees services margins remaining stable with potential upside. The $380 target implies roughly 28% upside from current levels and values Apple at about $4.35 trillion.

Apple reported second-quarter iPhone and Mac sales that topped analyst expectations, with demand holding steady across key categories. Data show Apple gained ground in China, supported by relatively stable pricing as some competitors raised theirs. Apple shares have risen nearly 50% over the past year and about 20% since April.

Apple is preparing a new product lineup for later this year, with industry reports pointing to a first foldable iPhone alongside new iPhone 18 Pro and Pro Max models expected in September. Analysts and investors are updating forecasts and reassessing demand as the company moves toward that product cycle.