Apple increases iPhone prices by £100 due to memory chip shortages

iPhone Prices Increase

Apple recently announced a £100 price increase across all iPhone models, including previously released versions. This adjustment was revealed during a product launch event that also featured the unveiling of Apple's first folding phone.

The Impact of "RAMageddon"

The price hike is linked to "RAMageddon," a term describing the current shortage and increased cost of memory chips. The surge in demand for these components by AI datacenters has led to a significant rise in manufacturing costs for electronics, reversing a long-standing trend of decreasing electronics prices.

Component costs have risen sharply, with memory chip prices increasing by over 300% year-on-year. Some chips are now five times more expensive than their previous listings. These increased production costs are being passed on to consumers.

Broader Market Effects

While the iPhone is the world's largest-selling electrical product affected, other smartphone manufacturers like Samsung and Google have also increased prices for their flagship phones by up to £80. Apple has also raised prices for its refurbished stock by £60 to £70, including models no longer sold new.

The impact is particularly noticeable at the lower end of the market, where many smartphone makers, excluding Apple, have discontinued older models due to economic inviability at higher price points. IDC forecasts a nearly 17% contraction in worldwide smartphone sales this year, reaching just over 1 billion handsets.