iPhone 18 price shock? Tim Cook warns Apple can’t absorb chip costs anymore

Apple customers may have to brace for a more expensive iPhone this year, with outgoing CEO Tim Cook warning that rising memory chip prices have made price hikes “unavoidable”.

The warning comes months before the expected unveiling of the iPhone 18 and just ahead of a leadership transition at Apple, with John Ternus set to take over from Cook in September.

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“We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers,” Cook told the Wall Street Journal in an interview.

“But the situation has become unsustainable ... the main point is, unfortunately, price increases are unavoidable,” he added.

Cook did not say which Apple products would see higher prices or how steep the increase would be. But with attention already turning to the iPhone 18 launch later this year, the comments are likely to be read as an early signal that Apple may pass on at least part of its higher component costs to consumers.

The iPhone 18 could reportedly cost as much as $200 more than the iPhone 17 lineup, depending on the model and configuration.

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The pressure is coming from a sharp rise in memory and storage prices, a segment where Apple has long been one of the world’s largest buyers. But the boom in artificial intelligence infrastructure has changed the market. AI companies are aggressively buying memory chips for data centres and advanced computing systems, tightening supply and pushing up prices across the industry.

TechInsights estimates that memory and storage components inside the iPhone 18 Pro could cost Apple about $150 more than comparable parts used in the iPhone 17.

That puts Apple in a difficult position. The company has already been absorbing higher component costs through 2026, according to Cook, but the latest comments suggest that strategy may no longer be sustainable.

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For Apple, any price increase on the iPhone carries risk. The device remains the company’s most important product and a key driver of revenue, even as Apple pushes deeper into services, wearables and artificial intelligence. Higher prices could test consumer demand at a time when smartphone upgrades have already slowed in many markets.

The warning also comes at a delicate moment for the company’s leadership. If Ternus takes over in September, he may inherit not just the launch of Apple’s next flagship iPhone, but also the challenge of explaining why customers are paying more for it.