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By Amanda Greenwood
Associate News Editor
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Rising memory costs driven by the global AI boom could soon push smartphone prices remarkably higher—starting with Apple and spreading across the entire industry.
Apple has confirmed that price increases are on the way, with CEO Tim Cook warning, in a Wall Street Journal interview published on June 17, that higher costs for memory and storage chips have made price increases “unavoidable.”
Cook said that the company has spent months trying to absorb those costs and “shield” consumers from the increases, but the situation has become “unsustainable” as suppliers pass on steep price hikes.
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But behind the shift is a broader structural change in the tech supply chain.
A surge in AI-driven data center demand is consuming a growing share of global memory chip output, leaving less supply available for consumer electronics and pushing prices higher across the board.
Analysts say that even companies with Apple’s buying power are now competing for constrained supplies, marking a turning point for an industry that has historically been able to smooth over component price shocks.
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Industry-Wide Price Pressure
The knock-on effects are expected to reach far beyond Apple.
Nabila Popal, the senior research director for Worldwide Consumer Devices at IDC (International Data Corporation), told Newsweek that the scale of the shift is already forcing a major revision in forecasts:
“We are expecting the global smartphone average selling price to go up by 20 percent, which is a huge revision from our 14 percent forecast in February, as rising memory costs increase margin pressure on all smartphone OEMs,” adding that she didn’t believe that “any vendor will be immune to this crunch.”
She is predicting that “Android brands focused on low-end devices could see price hikes up to 40 percent, while premium players like Samsung and Apple will likely raise prices by 10 percent.”
Newsweek also reached out to Yang Wang, a principal analyst who leads the global smartphone forecasting at Counterpoint Research, who described the current memory shortage as one of the “most severe supply-side disruptions the smartphone industry has faced in years.”
He said, “We expect memory costs to remain elevated through at least 2027 as industry capacity continues to be redirected toward AI-related products,” adding that he also felt that the pressure will not be evenly distributed across the market.
While premium brands have stronger pricing power, lower-cost devices could see the steepest increases because memory represents a larger share of their bill of materials.
What the Top Smartphones Could Cost
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Apple hasn’t disclosed specific pricing plans or a schedule. For others, analysts expect uneven smartphone price increases, with entry-level devices hit hardest by rising component costs.
Low-end smartphones have seen bill-of-materials costs rise by roughly 20–30 percent, compared with about 10–15 percent for mid- and premium devices, according to Counterpoint Research.
Back in February, overall smartphone prices were forecast to increase by around 3-8 percent, reflecting manufacturers passing some of those costs to consumers.
Based on reported component cost increases and overall pricing trends, a reasonable illustrative estimate of how price rises could vary by tier is:
- Premium flagship models, including those sold by Apple, Samsung, and Google, could see prices rise by between 5 and 10 percent
- Mid-range Android devices could see an increase of between 10 and 20 percent
- Entry-level Android phones could potentially see even higher price spikes - maybe even into the 40 percent range, Popal told Newsweek.
Importantly, analysts caution that these figures are indicative rather than definitive. As Wang noted: “We would, however, caution against assigning specific price forecasts to individual upcoming smartphone models… the eventual outcomes may differ significantly between product tiers and regions.”
What the Price Hikes May Mean for Consumers
For consumers, the consequences could be immediate and widespread.
Flagship smartphone buyers may see more modest increases, but even a 6–10 percent rise on a high-end handset could add around $70–$150 to the cost of upgrading.
In lower-priced segments, where margins are thinner and manufacturers have less room to absorb costs, increases of 20 percent or more could make entry-level smartphones significantly less affordable.
At the same time, rising memory needs—driven by AI features and more powerful apps—mean manufacturers cannot easily reduce specifications to offset costs.
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Contact Newsweek editors on this story: John Fitzpatrick and Yannick Demoustier.
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