Apple CEO warns price hikes 'unavoidable' as chip costs bite - WSJ
Investing.com -- Tech giant Apple Inc (NASDAQ: AAPL) plans to hike prices for its products to curb the increasing costs of memory and storage chips, The Wall Street Journal reported Wednesday. "Unfortunately, price increases are unavoidable," CEO Tim Cook told the Journal in an interview.
Cook was direct about the strain on Apple’s cost structure. "We’re doing our best to mitigate the huge increases that are being passed to us... but the situation has become unsustainable," he told the Journal. Macs and iPads are expected to be the first products to see higher price tags, a trajectory consistent with Apple’s decision to raise the starting price of its Mac Mini in May. The timing of broader hikes and the full list of affected products remain unclear, according to the report.
Apple is hardly alone in confronting this pressure. Microsoft’s newly launched Surface Pro 13-inch starts at $1,499 and its Surface Laptop at $1,599, roughly 50% above the prior-generation models that launched in 2024 at $999, with the AI-driven memory shortage cited as a central reason for the jump, according to reporting by Yahoo Finance. The repricing across the PC industry reflects a structural shift in the memory market that shows little sign of easing soon.
S&P Global Ratings warned in a June 11 report that memory prices are "poised to stay elevated on tight supply stemming from surging AI demand," forecasting buoyant conditions in the memory chip market at least through 2028. Insatiable demand for high-bandwidth memory and enterprise solid-state drives, fueled by the buildout of AI infrastructure, has created a persistent supply-demand imbalance that component buyers including Apple have been unable to offset through normal procurement channels.
Apple shares closed down 1.1% at $295.95 on Wednesday before recovering to $297.00, a gain of roughly 0.36%, in after-hours trade as investors weighed the potential revenue upside from higher product pricing. The stock has traded in a 52-week range of $195.07 to $317.40, and the company carries a market capitalization of approximately $4.34 trillion.
Despite Wednesday’s session decline, Apple’s underlying fundamentals remain strong. The company’s most recent quarterly results, reported April 30 for fiscal Q2 2026, came in ahead of expectations: earnings per share of $2.01 beat the $1.93 consensus, while revenue of $111.2 billion exceeded the $108.9 billion forecast. The stock rose 3.69% after that report, and analysts have issued 25 upward EPS revisions over the past 90 days.
The next major test for investor confidence will be Apple’s fiscal Q3 2026 earnings call, tentatively scheduled for July 30. That report will be the first opportunity for analysts to press management on the margin impact of elevated memory costs and to extract a firmer timeline for the product price increases Cook flagged Wednesday.
Looking further ahead, Apple’s anticipated September event looms as a pivotal moment for pricing strategy. The iPhone 18 lineup is expected to debut then, alongside a rumoured foldable iPhone Ultra carrying a price point of approximately $1,999. Analysts have suggested that a premium foldable tier could help absorb component costs while providing cover to hold mainstream iPhone 18 Pro pricing steady