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

Apple users should prepare for potential price increases on the upcoming iPhone 18, as CEO Tim Cook has indicated that the rising costs of memory chips have made such hikes inevitable. This announcement arrives just before the anticipated launch of the iPhone 18 and coincides with a significant leadership change at Apple, with John Ternus slated to succeed Cook in September. In a recent interview with the Wall Street Journal, Cook expressed the company's struggles to manage the escalating costs that suppliers are passing on. "We're doing our best to mitigate the huge increases... But the situation has become unsustainable. Unfortunately, price increases are unavoidable," he stated. While Cook did not specify which products would see these hikes or how significant the increases would be, his remarks are interpreted as an early indicator that Apple may transfer some of its increased operational expenses to consumers. Reports suggest that the iPhone 18 could be priced up to $200 higher than its predecessor, the iPhone 17, depending on the specific model and configuration. This price pressure is largely attributed to a significant spike in memory and storage costs, particularly due to the booming demand from artificial intelligence firms that are aggressively purchasing chips for data centers and advanced computing systems. TechInsights estimates that the memory and storage components in the iPhone 18 Pro could cost Apple roughly $150 more than similar components used in the iPhone 17. Cook has previously indicated that Apple has managed to absorb rising component costs until 2026, but his latest comments hint that this strategy might no longer be feasible. For Apple, increasing iPhone prices poses a considerable risk, as the device is the cornerstone of the company's revenue stream. Although Apple is expanding into services, wearables, and AI, any hike in iPhone pricing could challenge consumer demand, particularly as smartphone upgrades are already slowing in various markets. This scenario unfolds at a pivotal time for Apple's management, as Ternus will not only be responsible for launching the next flagship iPhone but will also need to address the reasoning behind the anticipated price increases to customers.