Nintendo’s recent warning about rising memory costs, which led to an 8% drop in its shares, signals risk for Apple. As memory prices surge, the pressure on Apple’s profit margins grows for the second half of 2026.
Memory prices almost doubled in the first quarter of 2026 compared to the previous quarter, according to research firm Trendforce. The reason is clear: demand from AI servers is using up memory components so quickly that it is tightening supply for the whole hardware industry, including gaming consoles and smartphones.
Nintendo is increasing the price of its Switch 2 console in Japan, the United States, and other markets. In the U.S., the price will rise from $450 to about $500 in September. The company currently expects to sell 16.5 million Switch 2 units this fiscal year, down from 19.9 million last year. These higher prices and lower sales are a direct result of rising component costs, especially for memory, and tariff pressures.
So far, Apple has managed to absorb higher memory costs without raising iPhone prices, but this might not continue. Memory makes up about 10% to 15% of the total cost to build a high-end smartphone, according to IDC. During its late-April earnings call, Apple’s outgoing CEO said memory costs would have a greater impact on the business after the June quarter.
John Ternus will become Apple’s new CEO on September 1. One of his first big choices will be whether to raise iPhone 18 prices to protect profits or keep prices steady and absorb the extra costs. Both options carry risks. Raising prices could hurt demand, while keeping prices flat as costs rise might worry investors who are watching profit margins closely.
Nintendo’s situation previews the decision Apple faces this year.
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