DRAM shortage leaves $1B in Apple chips idle ahead of iPhone 18 Pro launch

Apple ↗ 0.29% has rolled out a leasing program for iPhones and other hardware, offering consumers a subscription-style alternative to outright purchases as an AI-driven memory chip shortage pushes electronics prices higher across the industry.

Apple Upgrade Replaces Older Payment Plans

The program, called Apple Upgrade, launched on July 28 in the United States with Klarna ↘ 1.78% as its financial partner. It covers most iPhone, iPad, Mac, and Apple Watch models, with 12- or 24-month lease terms for phones and watches and 24- or 36-month terms for Macs and iPads. Monthly payments start at $17.99 for iPhones, $11.99 for Apple Watches and iPads, and $24.99 for Macs.abcnews+2

At the end of a lease, customers can upgrade to a new device, purchase the product, or return it. Apple has discontinued new enrollments in its iPhone Upgrade Program and iPhone Payments to make way for the new service. Unlike the older program, Apple Upgrade does not include AppleCare coverage.reuters+2

AI Boom Drives Supply Chain Turmoil

The program arrives as the AI industry's insatiable demand for memory chips has created cascading shortages for consumer electronics makers. Data centers are consuming so much DRAM and NAND flash memory that smartphone manufacturers are competing for what remains. Apple CEO Tim Cook told The Wall Street Journal News Corp ↘ 4.19% in June that component price increases were "unavoidable".cultofmac

Apple has already raised prices on Macs, iPads, HomePod, Apple TV, and Vision Pro. The iPhone 18 Pro lineup, expected this fall, faces further pressure: analyst Tim Culpan has reported that approximately $1 billion worth of Apple's new A20 Pro chips are sitting idle at TSMC Taiwan Semiconductor Manufacturing Company Limited ↗ 0.44% because there is not enough DRAM available to complete the packaging process.vietnamnet+1

Pricing Uncertainty Looms Over Fall Launch

Analysts expect the iPhone 18 Pro and Pro Max to carry price increases ranging from $100 to $300 over their predecessors, according to estimates from Bloomberg's Mark Gurman and GF Securities analyst Jeff Pu. Reuters reported that Apple Upgrade is being positioned to offer lower monthly payments than existing financing options, softening the blow of rising hardware costs. As the New York Times noted, the program reflects Apple's broader shift toward a subscription-driven business model at a moment when sticker prices are climbing industrywide.nytimes+2