Apple Raises iPhone Prices as AI-Driven Memory Shortage Spreads to Smartphones

Apple has raised prices across its iPhone lineup as an industry-wide memory shortage driven by the artificial intelligence boom pushes up the cost of components used in consumer electronics.

The company on Tuesday unveiled the iPhone 18 Pro and iPhone 18 Pro Max at prices $100 higher than their predecessor models, while introducing its new foldable iPhone Duo at $1,999. Apple has yet to announce the entry-level iPhone 18.

The price increases extend beyond Apple's newest premium devices. The company also raised the prices of older iPhones still sold through its online store, going back to the iPhone 16, the oldest generation currently available new from Apple.

The iPhone Air, launched nearly a year ago at $999, now costs $1,099. The iPhone 17e and iPhone 17 have also increased by $100 to $699 and $899, respectively.

Apple's iPhone 16 now sells for $799, effectively restoring its original launch price when it debuted in September 2024.

The changes mark a broader shift in Apple's pricing strategy as the company confronts sharply higher memory costs. Rather than limiting the impact to its newest flagship models, Apple has passed some of the higher component costs across much of its current smartphone range.

The iPhone 18 Pro and Pro Max will be offered with 256GB, 512GB, 1TB and 2TB storage options.

At the top of the range, the 2TB iPhone 18 Pro will cost $2,399, while the 2TB iPhone 18 Pro Max will sell for $2,499. Both prices are higher than the previous most expensive iPhone, the 2TB iPhone 17 Pro Max.

The foldable iPhone Duo takes Apple's pricing even further. Its 2TB version will cost $3,199, making it by far the company's most expensive iPhone.

The pricing gives Apple considerable room to segment its premium lineup, with customers paying large premiums for additional storage and new form factors. It also illustrates the unusual cost pressures now affecting the smartphone industry. Apple has enormous purchasing power and a scale that allows it to negotiate aggressively with suppliers, yet the company is still being forced to contend with a component market increasingly shaped by demand from AI data centers.

AI Boom Creates A Memory Squeeze

The immediate pressure comes from the global memory market, where chipmakers are directing more production toward components used in AI infrastructure.

AI data centers require vast quantities of high-performance memory and other specialized chips. As manufacturers prioritize those higher-value products, supplies available for conventional consumer electronics can become tighter and more expensive. That dynamic has created an unusual link between the cost of running AI models in massive data centers and the price consumers pay for smartphones, tablets and computers.

Apple's former CEO Tim Cook highlighted the scale of the problem during his final earnings call as chief executive, saying the company had "reluctantly raised prices" on iPads and MacBooks because of higher memory costs.

"We did it because we're in what I would characterize as a 100-year flood on the memory pricing with exponential increases in memory prices," Cook said.

Apple had already raised iPad prices by as much as 25% in June and Mac prices by up to 20%. At the time, existing iPhone models were largely spared from the increases.

The latest iPhone pricing changes suggest that the pressure has now reached Apple's most important product category.

Others Too

The higher prices are part of a wider trend among consumer electronics manufacturers. Samsung and Google have also indicated that higher memory costs contributed to price increases on some smartphone models.

Google ultimately increased the price of its baseline Pixel 11 by $100. The company softened the increase by doubling the entry model's storage capacity while eliminating the previous 128GB version.

Shakil Barkat, Google's vice president of devices and services, described the market in unusually stark terms in July.

"There's never been an increase in memory prices like the world's going through right now," Barkat said ahead of the Pixel 11 launch.

The comparison is important because Apple, Samsung and Google have different supply chains and product strategies, yet all are being exposed to the same underlying shift in semiconductor demand.

The smartphone industry is therefore facing a cost problem originating outside smartphones themselves. The extraordinary investment required to build AI computing capacity is competing for semiconductor manufacturing resources with the devices used by consumers.

Apple has historically had greater pricing power than most smartphone manufacturers, particularly at the premium end of the market. Its customer base has shown a willingness to pay more for higher-end models, additional storage, and new designs.

That gives Apple some protection against component inflation, but it does not eliminate the underlying risk. Passing higher costs to customers can preserve margins, but it can also make upgrading less attractive, particularly in markets where consumers are already facing pressure on household budgets.

Apple's decision to raise prices on older models is especially notable. Those devices typically serve as lower-cost alternatives for customers who want an iPhone without paying flagship prices. Increasing their prices narrows the gap between Apple's older and newer generations and could push some consumers toward buying newer models, accepting higher prices or delaying an upgrade altogether.

At the same time, Apple's expansion into more expensive products such as the iPhone Duo gives the company additional opportunities to capture revenue from customers willing to pay for premium hardware.

The smartphone price increases highlight a less visible consequence of the AI investment boom.

The enormous spending by technology companies on data centers, AI accelerators and supporting infrastructure is increasing demand for specialized semiconductors and memory. That demand can alter manufacturing priorities throughout the chip industry, affecting the availability and cost of components used in everyday electronics.

For consumers, the result is increasingly visible at the checkout counter. Apple's latest pricing decisions are seen as an indication that the AI boom is no longer only a story about data-center spending and technology companies racing to build computing capacity. It is beginning to influence the economics of the hardware carried by billions of consumers.

The iPhone 18 Pro and Pro Max will be available for preorder on September 12 and will go on sale September 18.