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- Apple IPhone Price Hike Imminent | Tim Cook Cites Chip Shortage, Rising Costs
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Tech company Apple may soon increase the prices of iPhone and its other products. The company’s CEO Tim Cook told in an interview to ‘The Wall Street Journal’ that ‘due to the ongoing shortage of memory and storage chips around the world, the cost of components has increased a lot.’
He said that till now Apple was one of those companies which had not increased the prices of its smartphones after launching despite the memory crisis. Till now the company itself was bearing the burden of increased costs, but due to increasing pressure from suppliers, it has become helpless to increase the prices.
iPhone 18 series may be expensive, other brands have increased prices
Recently there were reports that despite having more RAM, the prices of the next generation iPhone 18 will not increase, but Tim Cook’s statement has changed these speculations. Inflation has been continuously seen in the smartphone industry for the last few months.
Other big brands like Xiaomi, OnePlus, Oppo have increased the prices of their handsets. In contrast, Apple had maintained its hold in the market by keeping the starting prices of its flagship models stable, but now it is finding it difficult to maintain this strategy.
Decision taken amid launch of foldable iPhone
This statement of Tim Cook has come at a time when Apple is preparing to launch its first foldable iPhone along with iPhone 18 Pro and iPhone 18 Pro Max in the market at the end of this year.
The components of foldable devices already cost more than traditional smartphones. In such a situation, increasing pressure on the supply chain can affect the pricing decisions of the company.
Company will not set up its own factory, will look for options to improve supply
Tim Cook said that Apple is ready to use its financial resources to improve the availability of components. However, he ruled out the possibility of the company setting up its own memory manufacturing facility.
He suggested that the company should consider new sourcing options. This also includes evaluating supply chains that are limited by geopolitical and regulatory restrictions.
Reason for smartphones becoming expensive: AI boom increased demand for chips
The biggest reason for electronics goods becoming expensive all over the world is the global AI boom. There has been a huge surge in demand for AI servers and data centers in the last one year. This has created a race to buy components like DRAM and high-bandwidth memory (HBM).
Chip manufacturing companies are now giving priority to high-profit AI infrastructure projects. Because of this, consumer electronics brands have to make do with fewer components and competition among them has increased.
Not just Apple or phones, other consumer products will also be affected
This chip shortage is not limited only to Apple or the smartphone industry. This month, industry organizations representing automakers, retailers and electronics manufacturers warned that the memory shortage could make many consumer products costlier.
Apart from this, there is a possibility of major disruption in the supply chain. Nothing’s co-founder Carl Pei has also indicated that this surge in component prices is not going to stop soon.
Knowledge Part: What is DRAM and what is its function in smartphone?
DRAM stands for Dynamic Random Access Memory. This is the temporary memory i.e. RAM of smartphones, iPads and computers, which helps the device in running apps faster and multitasking.
DRAM processes data in the background while playing games or using heavy AI features. Today, AI servers require a lot of DRAM, which has led to its shortage in the market and increased costs for smartphone companies.
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