Tim Cook’s call with analysts this week ran short, and his message was one Apple investors rarely hear from him: prices are going up. The chief executive said the global shortage of memory chips has grown so severe that even Apple, long shielded by its scale, can no longer absorb the cost, and product price increases are “unavoidable,” according to people familiar with the call. The Wall Street Journal first reported the remarks. CNBC said the memory crisis meant “even Apple can’t be safe,” and ABC News confirmed the substance within hours.
The admission lands at an awkward moment for the company. Apple is expanding its product line at the same time its bills are rising. Forbes and CNET, citing multiple people familiar with the plans, reported that the foldable iPhone Ultra will arrive in September, alongside the iPhone 18 Pro. The first batch of iOS 27 features has also surfaced, sketching a company pushing into new hardware territory while its supply chain strains.
Memory prices have climbed through the year as data-center builders buy up DRAM and NAND for AI servers, leaving less supply for phone makers. Apple has traditionally ridden out such cycles with long-term supply contracts and prepayments to memory vendors, agreements that lock in volume at negotiated rates. This cycle is different, people familiar with Apple’s procurement said: the shortage is so broad that even contracted shipments are being renegotiated at higher prices.
The September lineup is Apple’s most ambitious in years. The foldable iPhone Ultra is expected to be the company’s first answer to the foldable phones Samsung has sold since 2019, and analysts expect it to carry a premium over the Pro line, though Apple has not announced a price. The iPhone 18 Pro will arrive in the same month, and the iOS 27 update, whose first features leaked this week, is expected to lean heavily on the on-device AI tools Apple has been building since 2024.
The timing puts Apple in an unusual bind. Cook’s warning suggests the company will pass at least some of its higher component costs to customers, a step it has avoided in recent product cycles even as rivals raised prices. Analysts said the pass-through is likely to be selective: the foldable Ultra, aimed at early adopters, can absorb an increase more easily than the mass-market iPhone 18 line, where customers have shown little tolerance for sticker shock in mature markets such as China.
Memory suppliers, for their part, are prioritizing AI customers. Server builders are paying premiums for high-bandwidth memory used in accelerators, and chipmakers have shifted production lines toward those products, according to industry executives. That reallocation, not a shortage of raw capacity, is what is squeezing handset makers, the executives said. The squeeze is expected to last at least through the holiday quarter, when new capacity at memory fabs begins to come online.
The two forces, a cost crunch and a product push, are colliding inside Apple’s planning calendar. The company must price the foldable Ultra and the iPhone 18 Pro months before launch, while memory contracts for the holiday quarter are still being negotiated, people familiar with the process said. A wrong guess on memory prices could compress margins on the company’s most important product line of the year.
For consumers, the practical question is how much of the increase shows up in store prices. Cook did not say, and Apple declined to comment beyond his remarks. Analysts expect the company to hold the line on the base iPhone 18 and absorb some cost internally, while letting the foldable carry the increase. That approach would protect unit sales where competition is fiercest and collect the price rise where demand is strongest.
Apple is walking a narrow path: reassure investors that demand justifies a bigger lineup, warn them that costs will dent margins, and keep customers buying through both. Its record of navigating supply shocks, from the 2021 chip crunch to the pandemic-era logistics jam, gives executives some cover. But memory is different from most components. It is a commodity with a visible spot market, and when prices turn, they turn fast.
The memory industry is responding, but slowly. The largest suppliers have announced new fabrication plants, and executives say additional capacity will arrive through 2027, according to analysts who track the sector. Until then, every phone, laptop and server shipped competes for the same pool of wafers. That arithmetic has pushed contract prices for high-end memory up sharply in recent months, and buyers say further increases are already on the table for the second half of the year.
The reaction among consumers will be tested in September. Apple’s rivals have already raised prices on their premium phones this year, and foldable models from Samsung and others carry four-figure price tags in most markets. If Apple follows, the foldable Ultra would become one of the most expensive mainstream phones ever sold in the United States, a test of how far the foldable market has come since Samsung’s first awkward attempts in 2019.
Whether the September launch can blunt the impact of rising costs will determine how the market reads Cook’s warning in the months ahead. For now, the company’s message is that it can no longer shield customers from a shortage squeezing the entire industry, and that it expects them to pay for what comes next.
