Apple, Microsoft hike prices over surging chip costs
Tech giants Apple and Microsoft have raised prices on several popular products, citing soaring memory chip costs driven by the expansion of AI data centers.
Apple and Microsoft have implemented significant price increases on some of their best-selling products, blaming soaring memory chip costs amid the AI boom.
Apple on Thursday raised prices across its range of Macs and iPads, with many popular models seeing hikes of 20% or more. The base model MacBook Air now retails in the US for $1,299, up from $1,099, while the lowest-spec MacBook Pro rose from $1,699 to $1,999. The base price of the iPad Air increased from $599 to $749, and the iPad Pro jumped from $999 to $1,199. Apple's entry-level MacBook Neo is now priced at $699, up from $599. The Mac Studio M3 Ultra desktop computer saw the steepest increase, jumping from $3,999 to $5,299.
An Apple spokesperson said the company had shielded consumers from rising chip costs until now but had "reached a point where we need to begin raising prices." "The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage," the spokesperson added. "We have never seen a component price increase this much, this quickly."
Apple's stock price fell more than 6% following the price hikes, its steepest drop since US President Donald Trump's "liberation day" tariff announcement last April.
Consumer tech analyst Trevor Long from Australia expects the price increases to affect Apple's sales. "Some products, like the MacBook Neo, while excellent, were also outstanding because of price. This hits that hard," Long told Al Jazeera. He said the coming year will be challenging for leading tech players and expects the next iPhone to see a $50–150 price increase depending on models.
Microsoft also cited rising chip prices in confirming that it would raise prices on the 512GB and 1TB models of its Xbox console by $100 and $150 respectively. "We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options," Microsoft said. "Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027." The company noted that the entire consumer electronics industry is struggling with the components crisis, but consoles are hit particularly hard.
