Artificial intelligence comes with a hidden cost, and for Apple it may translate into higher prices for its most iconic devices. Dubbed RAMageddon, the global shortage of memory and storage chips is driven by AI's insatiable demand for hardware. Outgoing Apple CEO Tim Cook recently sounded the alarm: the next iPhone, Mac, or iPad could carry a higher price tag due to surging component costs.
In an interview with the Wall Street Journal, Cook stated that price increases are "unavoidable" despite efforts to absorb costs that have quadrupled since last year. He described the situation as "unsustainable." While not specifying which products will be affected or when prices will rise, Cook had already raised the issue last April after delivering record quarterly sales. Incoming CEO John Ternus also warned about the problem in the same month.
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Impact on iPhone and beyond
According to memory supply experts cited by the Financial Times, the iPhone seems almost certain to be impacted. Apple is expected to launch its next iPhone in September, providing an opportunity to announce higher prices. However, other devices like Apple Watch, Mac, iPad, and Apple Vision Pro also contain DRAM and NAND chips, so they could be affected. Research firm TechInsights estimates that Apple would need to add another $270 to the next iPhone Pro to maintain its profit margin. The iPhone 17 Pro currently starts at $1,099.
AI has not yet benefited Apple
So far, artificial intelligence has not been a particular boon for Apple. The company is under pressure to define its AI strategy for devices. Earlier this year, it paid a $250 million settlement to end a false advertising lawsuit after failing to deliver AI features promised two years ago. The Worldwide Developers Conference in June showed progress, including a revamped Siri. But more on-device processing means more memory needs, a trajectory that seems destined to make consumers pay more for Apple products. For deeper insights on formal verification in AI, check our article on Pramaana Labs. Also, the slowtech revolution offers an alternative approach to reducing tech consumption. For general context on chip costs, refer to Wikipedia's entry on computer memory.
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