Tim Cook Says More Apple Price Hikes Are 'Unavoidable.' AI Is Why.

Apple raised prices on most iPad and MacBook lines last month. On Thursday, the company told investors more price increases are coming, and the cause is not ordinary inflation. It is the same force behind the global AI buildout.

In Apple's fiscal third-quarter earnings call, CEO Tim Cook said further price hikes are "unavoidable," the same word he used in a separate interview with the Wall Street Journal earlier this week. The constraint is concentrated in memory, the chips that store working data inside phones, tablets, and laptops. Apple executives named two pressures on the call: access to advanced chips and soaring memory prices. The memory piece is the larger driver.

AI training runs depend on a specific kind of memory called high-bandwidth memory, or HBM, which is sold mostly to the companies building large language models and AI infrastructure. That demand has pulled memory fab capacity toward HBM, tightening the supply of conventional DRAM that goes into consumer devices. The two memory types are made on related production lines, and shifting capacity toward HBM leaves less room for the kind Apple buys in bulk. As Cook put it on the call: "If you look beyond September, we see the market pricing for memory continuing to increase, which could drive an increasing impact on our business."

The record June quarter is a clean number. Apple reported its largest-ever fiscal Q3 on Thursday, with growth across products and geographies. The forward guidance is the harder story: current-quarter revenue growth will come in below analyst expectations, because Apple cannot get enough of the chips it needs for Macs, iPads, and iPhones. Inventory carried over from earlier production is cushioning the September quarter, Cook said, but the benefit diminishes after that. The same cushion that helped Apple hit a record in June starts to work against it in December.

The squeeze is not Apple-specific. Counterpoint Research estimates, cited in coverage of the call, put global smartphone shipments at their lowest level since 2013 in the most recent quarter, a decline the firm called "the single biggest drag on the smartphone industry." AI infrastructure is the new priority buyer of the world's most-advanced chipmaking capacity, and consumer electronics is sitting further down the allocation queue.

Apple has so far held the iPhone line. Watchers expect iPhone 18 pricing to move, and the question is now when, not whether. Apple has already moved prices on iPad and MacBook, which sets a precedent. Several outlets, including Six Colors and CNET, have framed Thursday's call as potentially Tim Cook's last, though Apple has not announced a CEO transition. The dated next milestone is the September-ending quarter's earnings report, which will show whether the carried-inventory cushion held or whether the structural squeeze arrived before the December quarter.