Apple's latest product launch made headlines around the world with its first folding phone. Buried in the slick showcase, however, was a rather less glamorous reveal: a £100 price increase across all iPhones, including older models.
The culprit has been dubbed "RAMageddon", and it has reversed a decades-long trend of electronics getting cheaper. The cause is the AI gold rush, which is hoovering up every memory chip in sight for vast datacentres. The result is a severe shortage of chips and other critical components for electronics, phones included.
Costs have duly rocketed, with some chips now five times dearer than their previous list prices. Everyday electronics are suddenly much more expensive to make, and that cost is being passed straight to consumers.
"Two things are happening at once," says Francisco Jeronimo, vice-president of client devices at research firm IDC. "Component costs have risen sharply, with memory alone up more than 300% year on year."
Because older iPhones use the same pricey memory as the new ones, Apple is pricing them as current products, he adds. The iPhone isn't the first device to get a RAMageddon price bump, but it is the single biggest-selling electrical product in the world. For many, that means the real cost of the AI splurge is £100, with nothing extra in the box to show for it.
Other smartphone makers have raised prices too: Samsung and Google have added up to £80 to their flagship phones. Apple has also increased the price of its refurbished stock by £60 to £70, including the older iPhone 15, which is no longer sold new. According to data from Uswitch, though, the increase has yet to reach the third-party refurbished iPhone market.
"A refurbished iPhone 16 has held at about £503 all summer, roughly where it was before the 18 Pro launch," says Ernest Doku, a Uswitch mobiles expert. "A refurbished 14 is about £10 cheaper than it was in June, while the 16 has simply stopped falling in price."
Most smartphone makers besides Apple have discontinued older models that were no longer economically viable and likely wouldn't sell at higher prices. The impact has been especially acute at the lower end of the market.
In its latest forecast, IDC predicts the steepest annual contraction in worldwide smartphone sales on record this year, falling almost 17% to just over 1bn handsets. "People are buying fewer phones and paying considerably more for those they do buy," Jeronimo says.
Other electronics have seen even bigger rises. Computer makers, far more exposed to rapidly jumping memory and chip costs, have raised prices several times over the past 18 months. Microsoft added up to £220 to some of its Surface computers, while also releasing versions with half as much memory to try to keep prices down. That move has forced the company to redesign Windows to run comfortably on only 8GB of RAM, which it hasn't had to do for several years.
Many of PC maker Dell's high-end laptops have jumped by as much as 25%, while the repairable laptop maker Framework has had to continually adjust prices as costs fluctuate. Even Apple added £100 to its lower-cost MacBook Neo, along with rises to most models in its Mac and iPad lines in June. "We have never seen a component price increase this much, this quickly," the company says in a statement.
Games consoles aren't immune either. In a rare state of affairs, Microsoft recently raised the price of its near six-year-old console to £670, up from its original launch price of £449. "Console storage and memory prices have increased by more than 2.5 times, and we expect another doubling by the autumn of 2027," the company says.
Unfortunately, £100 added to the cost of a phone may only be the beginning. Key memory producers, including SK Hynix, suggest the shortages could last beyond 2030. Jeronimo says memory prices will keep rising well into 2027, even if the pace has slowed from the "extraordinary spikes" seen earlier this year.
"Even once memory costs ease, I do not expect smartphone prices to fall back to the same levels as last year," he says. "Increases in this industry tend to be sticky. Once customers have absorbed a higher price and manufacturers have rebuilt their margins, companies hold the line and add value through storage or features, rather than cutting the ticket price."
The bad news for consumers, Jeronimo says, is that "the era of cheap smartphones - or any device to be honest - is over."