Apple’s outgoing chief executive Tim Cook has warned that price increases are “unavoidable” after the cost of memory chips surged to “unsustainable” levels — the latest sign of a pricing crisis that is also squeezing small businesses across Britain.
Speaking to the Wall Street Journal, Cook said the technology giant had been trying to shield customers from the huge cost increases being passed on by memory chip suppliers, but “the situation has become unsustainable”. He did not say when prices would rise or which products would be affected, though research firm Omdia expects Apple’s new phones to cost up to $150 more than the iPhone 17s as the firm upgrades specifications to support new AI features.
“Apple boss Tim Cook warns price rises unavoidable as memory chip costs soar; small UK firms also brace for further hikes.”
The price of Ram, typically one of the cheapest computer components, has more than doubled since October 2025. The boom in artificial intelligence has driven up memory chip prices in recent months, while the war in Iran has disrupted the global supply of helium, a gas crucial in making semiconductors. Omdia’s smartphone market analyst Chiew Le Xuan said most smartphone brands have already raised prices, pulled back on promotions or cut specifications to protect profit margins. “This is the new pricing reality, not a temporary spike,” he told the BBC.
Meanwhile, small business owners in the UK say they have raised prices by nearly 17% on average over the past year, and a quarter expect to put them up again before the end of summer. Research of 500 business owners, commissioned by Smart Energy GB, found two in three have raised prices three times or more in the last five years. Supplier costs and energy bills are the most common reasons, while nearly half cited staff wages as a factor. Over the last five years, monthly energy costs have increased by an average of 23% for small firms.
Victoria Bacon, a director at Smart Energy GB, said: “We can see many small business owners are doing everything they can to manage rising running costs, while limiting the impact on their customers.” The research found 86% have made changes behind the scenes to avoid putting costs on customers, including cutting non-essential spending, reducing profit margins, and reducing their own salaries. A quarter have cut their energy use, and 23% have negotiated with suppliers for better deals.
Despite these efforts, 82% of small business owners are bracing for further increases throughout 2026. While a third said customers have generally been understanding when prices rose, 81% remain worried about increasing them again. Of those concerned, 38% said customers are already struggling with the cost of living and may not be able to stretch their budgets further, and 36% fear customers could look elsewhere for cheaper alternatives.
Apple’s Cook, who is due to be replaced by John Ternus as CEO in September after 15 years in the role, said: “We definitely need memory pricing and supply to return to reasonable levels for consumer products. That’s the bottom line.”
In a separate development, US President Donald Trump said Apple had agreed to work with chipmaker Intel to make its chips in the US. “I decided to help Intel because we need to design and build our Chips right here in America,” he wrote on his social media platform Truth Social. Intel’s shares rose more than 10% when US stock markets opened on Thursday. The BBC has contacted Apple and Intel for comment.