U.S. — Apple is expected to increase iPhone prices in its upcoming product debut due to rising memory costs. John Ternus is the new CEO of Apple, having assumed the role after Tim Cook stepped down as CEO on September 1.

The leadership transition occurs as the company faces pressure from component suppliers. Tim Cook stated on an earnings 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, and we're continuing to evaluate this."

Supply constraints are driven by production requirements for high-bandwidth memory (HBM), which is critical for artificial intelligence applications. Micron estimates that producing a given amount of high-bandwidth memory (HBM) requires roughly three times as many wafers as producing the same amount of conventional DRAM. Manish Bhatia, president and COO of Micron, stated, "We need to build more wafer capacity. [It’s] a very different challenge for the industry than it had been for many years before, where technology alone was able to keep up with the demand."

Industry executives attribute the surge to broader technological shifts. Song Hyun-jong, president of SK Hynix, stated on the company’s most recent earnings call, "As AI spreads across various services such as search, coding, and productivity tools, the scope of demand is widening from a memory perspective. We are witnessing a structural shift in demand where both AI memory and conventional memory are growing together." Suppliers are adjusting their allocation strategies in response.

Apple has already implemented price adjustments in other areas of its business. Apple raised the price of Apple TV in the U.S. to $14.99 a month from $12.99. Apple TV has over 45 million paid memberships.

Apple increased the individual Apple One bundle price to $21.95 a month from $19.95. These changes come alongside mixed performance in other segments. Apple's Services segment gross margin was 75.6 percent in fiscal third quarter 2026. Apple Mac revenue grew 29 percent year-over-year in fiscal third quarter 2026. However, Apple App Store revenue fell 1 percent year-over-year in August 2026.

The company is also preparing for a shift in hardware design. Morgan Stanley estimates that Apple will build 7 million to 8 million foldable iPhones in the second half of 2026. Morgan Stanley estimates that Apple will build as many as 20 million foldable iPhones over the first product cycle.

Timeline

On March 31, 2026, DRAM prices for smartphones increased approximately 56 percent in the first quarter of 2026 compared to the previous quarter, according to Counterpoint estimates. By June 30, 2026, Samsung controlled 39 percent of the memory market in the second quarter of 2026, followed by SK Hynix at 26 percent and Micron at 25 percent, according to Counterpoint estimates. Also on June 30, 2026, DRAM prices for smartphones grew approximately 83 percent in the second quarter of 2026 compared to the previous quarter, according to Counterpoint estimates.

On that same date, the cost for 16GB of DRAM for a smartphone was estimated at roughly $42 in the second quarter of 2025 and about $181 in the second quarter of 2026, representing an increase of more than 300 percent. On September 1, 2026, Tim Cook stepped down as CEO on September 1.

What's New

Additional reporting shows several developments related to the company's strategy and leadership.

Why It Matters

The transition to John Ternus as CEO coincides with a period of pressure on component costs that affects Apple's core hardware business. The more than 300 percent increase in the cost of 16GB of DRAM for smartphones between the second quarter of 2025 and the second quarter of 2026 represents an input cost challenge. With Apple expected to increase iPhone prices in its upcoming product debut, consumers may face higher costs for new devices. The company's evaluation of these market pressures, as noted by Tim Cook, suggests that pricing strategies will remain a focal point for the new leadership.

The memory market dynamics reflect a structural shift driven by artificial intelligence adoption, which has widened the scope of demand for both AI-specific and conventional memory. Major suppliers like Samsung, SK Hynix, and Micron have seen profit increases, with Samsung’s semiconductor profits jumping roughly 250-fold from a year earlier. These suppliers are prioritizing customers with committed future demand, which may influence how Apple secures components for its planned foldable iPhones and existing product lines. The interplay between rising component costs, supplier allocation strategies, and Apple's product roadmap under Ternus will define the company's near-term financial performance.