Apple’s latest product announcement included a significant price increase of £100 across its iPhone lineup, marking a reversal of decades-long trends of declining electronics costs. The price hikes stem from what industry observers term “RAMageddon,” a phenomenon triggered by artificial intelligence development consuming vast quantities of memory chips for datacentre infrastructure.
Memory chip costs have surged dramatically, with some components becoming five times more expensive than previous pricing. According to IDC research, memory costs alone have risen more than 300 percent year on year. Because older iPhone models utilize the same expensive memory components as newer versions, Apple has adjusted pricing accordingly across its entire product range. Other smartphone manufacturers including Samsung and Google have implemented comparable increases of up to £80 on flagship devices. Apple has also raised prices on refurbished inventory by £60 to £70, though third-party refurbished markets have not yet reflected these increases.
The impact extends well beyond smartphones. Computer manufacturers have implemented steepest increases, with some Microsoft Surface models rising by £220. Dell’s high-end laptops have jumped by as much as 25 percent, while gaming console prices have also climbed sharply. Microsoft recently increased its console pricing to £670, up from an original launch price of £449.
Global smartphone sales are experiencing historic contraction, with IDC forecasting an annual decline of nearly 17 percent to just over one billion handsets. Industry analysts attribute this to consumers purchasing fewer devices while paying substantially more for those they do acquire. Many manufacturers have discontinued older, lower-priced models deemed economically unviable at elevated price points, with the impact particularly acute in the budget segment.
Memory producers including SK Hynix have indicated supply constraints could persist beyond 2030. Analysts anticipate continued price increases extending into 2027, though at a slower pace than earlier spikes. Industry observers suggest that once consumers accept higher pricing levels and manufacturers restore profit margins, companies typically maintain elevated prices rather than reducing them, incorporating additional storage or features as justification for maintained costs.
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