Microsoft and Apple raise prices as AI-driven chip shortages hit Xbox, Macs and iPads
Microsoft will increase Xbox console prices by $100-$150 from August 1, while Apple has raised prices on Macs and iPads, citing unprecedented memory chip cost surges from AI demand.
Tech giants Microsoft and Apple announced significant price increases on Thursday for several products, blaming soaring costs of memory chips driven by artificial intelligence data center demand.
Microsoft said it will raise the price of its Xbox video game consoles worldwide by $100 to $150 starting August 1. The entry-level Xbox Series S will cost $500, while the Series X will reach $800. The 2TB model will be discontinued. This marks the third Xbox price hike after an earlier global increase in May 2025 and a US-only rise in October.
Apple followed through on CEO Tim Cook’s warning that price increases had become “unavoidable,” announcing higher prices for Macs and iPads on Thursday. The company described the component cost spike as an “unprecedented challenge,” stating in a written statement that “we have never seen a component price increase this much, this quickly.” The new entry-level MacBook Neo rose by $100, the 512GB MacBook Air and 256GB iPad Pro Wi-Fi by $200 each, the 1TB MacBook Pro by $300, and the 128GB iPad Air by $150. Analysts expect iPhone prices to rise later this year; IDC analyst Nabila Popal said the latest increases were larger than anticipated, potentially $200 for the iPhone Pro models.
The industry-wide impact is evident: Sony raised the PlayStation 5 price by €100 in Europe in April, Nintendo announced a 6% increase for the Switch 2 from September 1, and Valve’s new Steam Machine launched at over $1,000. Microsoft noted that consoles are typically not sold at a profit, and its gaming division—which accounted for about 8% of revenue in fiscal 2025—underwent restructuring in February. Apple shares fell 4.5% on Thursday, closing at $279.88.
