iPhone Prices Threatened to Rise, AI Becomes a New Problem for Apple

JAKARTA - Apple is facing new pressure from the artificial intelligence or AI fever. Not only has to catch up with competitors in AI features, the company is now also facing a surge in memory chip prices that could make iPhones, Macs, and iPads more expensive.

According to a report by TechCrunch, quoted Thursday, June 18, Apple CEO Tim Cook warned that a rise in product prices is difficult to avoid after the cost of memory and storage chips jumped sharply in the past year.

In an interview with The Wall Street Journal, Cook said Apple has been trying to absorb the cost increase. However, the price of memory chips has now quadrupled compared to last year.

"Price increases are inevitable," Cook said.

This condition is triggered by the explosion of the need for AI infrastructure around the world. The large demand for memory chips for data centers and AI systems triggered a global supply shortage. In the technology industry, the situation was dubbed RAMageddon.

Cook did not mention which products would be affected or when the price increase would be implemented. However, he had previously warned about the impact of RAMageddon on Apple's business.

In April, after Apple posted record quarterly sales, Cook said higher costs could weigh on the company's next performance. Apple's next CEO, John Ternus, also expressed similar concerns in the same month.

If Apple raises prices, the iPhone will almost certainly be affected, according to a memory supply expert to the Financial Times. Apple is expected to launch the next generation of iPhones in September. That moment could be the time for the company to introduce new prices.

The impact can be felt quite deeply.

Research firm TechInsights estimates Apple needs to add about $270 to the price of the next-generation iPhone Pro to keep its profit margin intact. Currently, the iPhone 17 Pro is sold starting at $1,099.

The increase in costs also threatens not only the iPhone. Other products such as the Apple Watch, Mac, iPad, and Apple Vision Pro use DRAM memory chips and NAND storage chips.

DRAM is working memory that helps devices run many processes quickly. NAND is a storage chip for storing data, applications, photos, and operating systems.

This pressure is felt a bit bitter for Apple. AI which is touted as a new growth engine actually helps increase production costs.

So far, AI has not really been a blessing for Apple. The company is still being sued to clarify its AI strategy on its devices, while competitors are moving more aggressively.

TechCrunch also reported that Apple paid a legal settlement of 250 million US dollars earlier this year to end a misleading advertising lawsuit. The lawsuit was related to an AI feature that Apple had promised, but had not arrived as users had hoped.

During the Worldwide Developers Conference or WWDC earlier this month, Apple began showing progress. One of them is through the Siri overhaul.

However, the more AI processing that is done directly on the device means that memory requirements will also increase. In the end, this trend has the potential to make consumers have to pay more for Apple products.