Apple’s recent product launch included a £100 price increase across its entire iPhone lineup, attributed to component cost inflation stemming from the AI industry’s massive demand for memory chips. The shortage, termed “RAMageddon,” has reversed a long-standing trend of declining electronics prices and driven memory chip costs up more than 300% year-over-year, with some components selling for five times their previous prices.
Because older iPhone models use the same memory chips as newer devices, Apple has priced legacy models as current products to reflect manufacturing costs. Other smartphone manufacturers, including Samsung and Google, have similarly raised flagship device prices by up to £80. Apple also increased prices on refurbished inventory by £60 to £70, though third-party refurbished markets have yet to follow suit, with prices on used models remaining relatively stable or declining slightly.
The price increases extend well beyond smartphones. Computer manufacturers have implemented particularly steep increases, with some companies raising prices multiple times over the past 18 months. Microsoft added up to £220 to certain Surface computers and introduced lower-memory alternatives, while Dell’s high-end laptops have jumped as much as 25%. Gaming consoles have also been affected, with Microsoft recently raising the price of its six-year-old console to £670 from its original £449 launch price.
Market research firm IDC forecasts the steepest annual contraction in worldwide smartphone sales on record, predicting a fall of nearly 17% to just over 1 billion handsets. Memory producers, including SK Hynix, suggest shortages could persist beyond 2030. Analysts expect memory prices to continue rising well into 2027, and caution that price increases in the industry tend to be permanent, with manufacturers maintaining higher prices through added features rather than reductions once cost pressures ease.
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