Following record iPhone sales, Apple is grappling with a global memory chip shortage, impacting future profitability. CEO Tim Cook acknowledged the challenge, anticipating margin pressure in the coming quarters. Increased demand from the AI build-out is straining the supply chain, potentially forcing Apple to absorb higher costs or raise prices.

The shortage stems from the tech industry's massive investment in AI data centers, which consume vast quantities of memory chips, competing with components used in smartphones. Analysts predict a 25% increase in Apple's memory costs. This situation puts pressure on Apple to make critical pricing decisions for its upcoming iPhone 18 models.

Apple's options include absorbing the rising costs, which will impact margins, or passing them on to consumers. One strategy could be a price hike of $100-$150 on the iPhone 18. Alternatively, Apple might raise prices on lower-storage models to encourage purchases of higher-margin, premium devices.

The company is also navigating a shortage of advanced processors for the iPhone 17. Apple will need to work with suppliers, like TSMC, to expand capacity. Investors will be watching closely how Apple manages these constraints, as they will directly impact the company's financial performance and future product pricing.