Key takeaways:
- Apple raised prices immediately on several MacBook, iPad, iMac and Apple TV products, while iPhone, Apple Watch and AirPods prices were not affected.
- Apple said AI data center expansion has driven an extraordinary surge in demand for memory and storage, creating component price increases it has not seen before.
- Microsoft’s Xbox division said it would raise some console prices by $100 and higher-memory models by $150, citing storage and memory costs that have increased more than 2.5 times.
Apple raised prices Thursday on several MacBook and iPad models, saying a surge in memory and storage chip costs tied to the artificial intelligence boom has forced it to pass higher expenses on to customers.
The increases took effect immediately and appeared on Apple’s online store by midday, according to NBC News. The iPhone, Apple Watch and AirPods were not included in the hikes, while affected products included MacBook, iPad, iMac and Apple TV models.
“The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage,” Apple said in a statement to NBC News. “We have never seen a component price increase this much, this quickly.”
Apple said it had “shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products, including today’s increases for iPad and Mac.” The company also said it was “working tirelessly to find solutions” and described the memory shortage as “an unprecedented challenge.”
Some Apple products rose by nearly 20%, the BBC reported. In the United States, the MacBook Pro with 1 terabyte of storage increased to $1,999 from $1,699. CBS News reported that the MacBook Air with 512 gigabytes of storage rose to $1,299 from $1,099, while the iPad Air with 128 gigabytes rose to $749 from $599. Apple’s lower-priced MacBook Neo, introduced earlier this year at $599, increased to $699 in the United States, according to CBS News. In the United Kingdom, the Neo rose from £599 to £699, the BBC reported.
NBC News reported that the price of the 13-inch MacBook Air jumped $200, an 11-inch iPad rose $150, the most basic iPad model rose $100, and Apple TV increased by $70 to $199. Evercore analyst Amit Daryanani wrote that the increases ranged from 17% to 25% across the core Mac and iPad base configurations, with larger percentage increases for lower-priced home devices, including Apple TV at 54%.
Apple shares fell sharply after the announcement. CBS News reported the stock was down $16.49, or 5.6%, to $276.68 in midafternoon trading. NBC News reported that, as of 2 p.m. ET, shares were down nearly 6%, wiping out about $250 billion in market value and putting Apple on track for its worst one-day performance in more than a year.
The company’s price hikes come as demand from AI data centers strains supplies of memory and storage components, particularly RAM. The International Data Corporation said in December that the memory market was at an “unprecedented inflection point” and predicted the chip shortage could last “well into 2027,” CBS News reported.
Apple CEO Tim Cook had signaled the pressure earlier this month in comments to The Wall Street Journal. “We’re doing our best to mitigate the huge increases that are being passed to us,” Cook said, according to NBC News. CBS News reported that Cook told the Journal, “I’ve never seen anything like it in any area in over 40 years.”
Other technology companies are also raising prices. Microsoft’s Xbox division said Thursday it would increase prices by $100 for some console models and $150 for higher-memory capacity models, according to NBC News. “Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027,” Microsoft said.
Analysts said Apple’s move showed that even the largest technology companies are struggling to absorb rising component costs. “This is a significant moment because even Apple, with its scale and buying power, is no longer immune to the rising cost of key components,” Paolo Pescatore told the BBC. David Naranjo of Counterpoint said he expected other PC and tablet brands to follow by raising prices, cutting discounts on entry-level models or shifting toward premium devices.
Nabila Popal of International Data Corporation told CBS News that iPhone price increases may still come later. “The storm isn’t over yet; this is just the beginning,” she said. “iPhones are the biggest revenue driver for Apple, so they are saving that announcement for later.”
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