By Angela Palumbo
While Apple is joining a growing list of tech companies raising prices for consumers this year, the iPhone maker's decision stands out.
CEO Tim Cook said in an interview with The Wall Street Journal on Wednesday that Apple plans to increase prices to offset rising memory and storage costs.
Component costs have been soaring as demand far outpaces supply, thanks to the growing need for hardware that helps power artificial intelligence. Other device makers such as HP Inc., Dell, Sony, and Nintendo have already said they are increasing prices.
But the decision wasn't as cut and dried for Apple. Until now, the company has used its strong relationship with suppliers to negotiate costs and keep prices stable.
The strategy has been a boon -- second-quarter iPhone and Mac sales came in better than analyst estimates as demand remained steady. Recent data have also shown the company's pricing strategy helped boost demand in China as competitors raised prices.
Even though Apple faced possible product margin declines by keeping prices the same, increased product sales were a positive for Apple Services, the highest-margin part of the business. More Apple devices sold meant more subscriptions for services such as the App Store and Apple Music.
It appears that strategy is no longer working, though.
"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," Cook said, according to The Journal report.
However, BofA Securities analyst Wamsi Mohan wrote on Thursday he thinks Apple will raise prices on just its higher-end models.
"This strategy, in our opinion, leverages share gains at the lower end and pushes prices higher in the more inelastic segments." Mohan wrote. He rates Apple as a Buy with a $380 price target.
Apple didn't respond to a Barron's request for comment. The stock was up 0.5% to $297.30 on Thursday.
It isn't just tech hardware that is becoming more expensive for consumers. Streaming services such as Netflix, Paramount+, Disney+, and HBO Max have also announced price increases over the past 12 months.
Apple and other hardware companies are hiking prices because of outside costs, though. Streamers aren't dealing with the same headwinds and are instead raising prices to pay for new content that will bring in new subscribers.
Regardless, prices across the board are rising. Apple joining the club proves this won't be stopping anytime soon.
Write to Angela Palumbo at angela.palumbo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 18, 2026 14:25 ET (18:25 GMT)
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