AI chip boom pushes Apple to raise device prices

Apple is preparing to raise the prices of its devices, with chief executive Tim Cook blaming a surge in the cost of memory chips driven by the global boom in artificial intelligence (AI).

The warning matters far beyond Apple's home market. A phone or laptop that costs more in dollars costs more still in a country that imports nearly all of its electronics and pays for them in a softer currency. For Zambian buyers, an AI-driven chip squeeze in Asia and a weaker kwacha pull in the same direction — up. This story sits within Kwacha News's technology coverage.

What Apple said

Cook, who is due to hand the chief executive role to Apple hardware chief John Ternus in September after about 15 years, told the Wall Street Journal that price rises had become unavoidable. The cost of the memory chips inside Apple's devices has climbed steeply, and the company says it can no longer absorb the increase on its customers' behalf.

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 from the increases, but the situation has become unsustainable.

— Apple chief executive Tim Cook, <a href="https://www.bbc.com/news/articles/c3wyxvqdx1zo">as reported by the BBC</a>

Cook did not say when prices would rise or which products would be affected, and Apple has set no figure publicly. What he did make plain is the cause. "There's less supply at a time when consumers want devices, and the memory guys are passing along huge price increases," he said, adding that memory pricing and supply need to "return to reasonable levels for consumer products."

How the AI boom raises chip costs

Memory chips store the data that phones, laptops and servers work with, and the same chips are in fierce demand from the data centres being built to train and run AI models. That demand has outrun supply. The price of RAM, one common type of memory, has more than doubled since October 2025, according to figures reported by the BBC. A second, smaller factor is the war in Iran, which has disrupted the global supply of helium used in chip manufacturing.

The squeeze is industry-wide, not an Apple problem alone. The chipmaker TSMC, which produces processors for Apple, Nvidia and AMD, has said it would not rule out price increases, and Samsung has warned that memory shortages will make devices more expensive. The research firm Omdia expects the global average selling price of a smartphone to rise about 20 percent in 2026 to an all-time high.

What it means for buyers

Omdia estimates Apple's next phones could cost up to 150 dollars more than the iPhone 17 range to support new AI features, though Apple has confirmed nothing. The firm frames the shift as lasting rather than temporary.

This is the new pricing reality, not a temporary spike.

— Chiew Le Xuan, smartphone market analyst at Omdia, <a href="https://www.bbc.com/news/articles/c3wyxvqdx1zo">via the BBC</a>

Demand has stayed strong despite the pressure: Apple's device sales rose 17 percent in the first quarter of 2026 against a year earlier, helped by China. Other electronics have already moved — Sony raised the price of the PlayStation 5 earlier in the year and Nintendo is lifting Switch 2 prices from September — so a broad reset of consumer-hardware prices is already under way.

Governments are treating chip supply as a strategic asset rather than an ordinary import. The United States took a 10 percent stake in the chipmaker Intel in August 2025, and Apple has agreed to work with Intel on producing chips inside the country. None of that eases the immediate shortage, but it shows how the contest for chips — the raw material of the AI era — is reshaping where and how the world's devices are built.

The Zambian angle

Zambia imports almost all of its phones, laptops and consumer electronics, and they are priced in dollars before a shilling of duty or a kwacha of margin is added. A 20 percent rise in the global price of a smartphone therefore arrives in Lusaka twice over: once in the dollar price set in Asia, and again through the exchange rate when that dollar price is converted to kwacha at the till.

That compounding is the real story for Zambian households and small businesses that depend on a working handset for mobile money, trading and study. Kwacha News has tracked how the AI build-out is reshaping markets, from the rebound in African startup funding to the public release of a powerful new AI model. The hardware cost of that boom is now reaching ordinary buyers.

What to watch

The first hard test is Apple's next iPhone launch, expected in September, when any new price will become visible. Beyond that, the question is whether memory supply catches up with AI-driven demand through 2026 or whether, as Omdia argues, higher device prices are here to stay. For import-dependent economies, the kwacha's level against the dollar will decide how much of that increase lands on local shelves.

Frequently Asked Questions

These are the questions readers have been asking since Apple signalled higher prices. Short answers follow, drawn from the BBC's reporting and analysis from the research firm Omdia.

What is driving up chip prices?

In short, the cause is the artificial-intelligence boom. The answer, simply put, is that AI data centres need vast quantities of the same memory chips that go into phones and laptops, and that demand has outrun supply. The key figure is RAM, whose price has more than doubled since October 2025.

How does the AI boom raise the cost of a phone?

Data from the industry shows AI servers and consumer devices compete for the same memory chips. As AI firms buy more, supply tightens and prices rise for everyone, so a chip shortage created by data centres shows up as a dearer handset on the shelf.

Why is Apple raising prices now?

According to Tim Cook, Apple has been absorbing the increases to shield customers but the situation has become unsustainable. The answer is that memory costs have risen so far that the company says it can no longer carry them, even as demand for its devices stays strong.

What are the effects for buyers in Zambia?

Analysis of the trade shows the impact is doubled in import-dependent markets. Zambia buys its electronics in dollars, so a roughly 20 percent global price rise lands once in the dollar price and again through the kwacha exchange rate, pushing handset affordability further out of reach.

Which products will cost more?

Apple has not published a product list, but research from Omdia suggests new iPhones could be up to 150 dollars dearer than the iPhone 17 range, and the firm expects smartphone prices across brands to rise about 20 percent in 2026. Other hardware, including games consoles, has already gone up.

Sources

BBC News: Apple to raise prices as AI boom pushes up chip costs (reporting Tim Cook's interview with the Wall Street Journal, and analysis from Omdia). Kwacha News coverage: African startup funding and the release of a powerful new AI model.