Apple CEO says price hikes are ‘unavoidable’ as rising chip costs squeeze tech giant: report

Apple customers may soon pay more for their favorite devices as the company faces soaring costs for memory and storage chips. The tech giant's CEO, Tim Cook, told The Wall Street Journal that Apple has tried to absorb the increases but can no longer fully protect customers from higher prices. Cook did not say when prices would rise or which products would be affected. "Unfortunately, price increases are unavoidable," Cook told the outlet. "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." HOW YOU CAN GET A SLICE OF APPLE'S $250M IPHONE SETTLEMENT Apple’s next major product launch is expected in September, when the company is likely to unveil its iPhone 18 lineup. The remarks come as artificial intelligence (AI) companies buy up huge amounts of memory and storage chips, according to The Wall Street Journal. Research firm TechInsights estimates Apple would need to add about $270 to the next iPhone Pro model to maintain its profit margins, the outlet reported. APPLE CHIEF TIM COOK SAYS IT WAS THE 'RIGHT TIME' TO STEP DOWN AS CEO Cook said DRAM chips are a key concern because more of them are now being used for AI servers. "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," Cook told The Wall Street Journal. "We definitely need memory pricing and supply to return to reasonable levels for consumer products. That's the bottom line." Apple may use its cash reserves to help expand chip supply, Cook said, but the company does not plan to build its own memory factories. "This is a hundred-year flood," said Cook. "I've never seen anything like it in any area in over 40 years." FORMER APPLE CEO SEES OPENAI POSES LARGEST COMPETITIVE THREAT TO TECH GIANT IN YEARS Apple announced earlier this year that Cook will step down on Sept. 1 after 15 years as chief executive.  He will transition to executive chairman of the company’s board of directors and will be succeeded by longtime Apple veteran John Ternus, the company’s senior vice president of hardware engineering. GET FOX BUSINESS ON THE GO BY CLICKING HERE Apple could not immediately be reached by FOX Business for comment. FOX Business' Bonny Chu contributed to this report.