Apple has raised prices on MacBooks and iPads due to a shortage of memory chips

Apple has announced price increases for a number of MacBook and iPad models. The company is thus passing on the increased costs of memory and storage to consumers, according to CNBC. Last week, CEO Tim Cook warned that it was no longer possible to keep prices down. “This is a once-in-a-century flood. In more than 40 years in the business, I’ve never seen anything like this in any industry,” the CEO said in an interview with The Wall Street Journal, commenting on the rise in memory chip prices.

Specifically, the MacBook Neo now costs $699 instead of $599. The MacBook Air with 512 GB of storage will cost $1,299 instead of $1,099. The price of the 128 GB iPad Air has increased from $599 to $749.

Other Apple devices have also gone up in price, according to Bloomberg: the price of the HomePod smart speaker has risen from $299 to $349, and that of its compact version, the HomePod mini, from $99 to $129, the Apple TV set-top box has gone from $129 to $199, and the price of the Vision Pro mixed-reality headset has jumped from $3,499 to $3,699.

Apple stated that until now, the company had managed to shield customers from rising component costs, according to a CNBC report citing an Apple spokesperson; however, the “consumer electronics industry is now facing an unprecedented challenge”: “The rapid expansion of AI data centers has caused an extremely sharp increase in demand for memory and storage. We have never before seen component costs rise so sharply and so quickly.”

The company added that it was “forced to start raising prices”—CNBC interpreted this as a hint that prices would continue to rise.

Apple shares fell 5% during trading on June 25 following this news.

According to data from Counterpoint Research cited by the TV channel, memory prices have quadrupled over the past three quarters as manufacturers are shifting more and more production capacity toward high-bandwidth chips used in AI servers.

Analysts also expect iPhone prices to rise in the future. Higher component costs could add about $200 to the price of each iPhone for Apple, according to Tarun Patak, research director at Counterpoint Research, as quoted by CNBC. He expects prices to rise by about $150–200 across the entire lineup, with models featuring larger storage capacities seeing a more significant increase than the base versions.

However, the rising cost of Apple products is not driven solely by the increasing price of memory. According to IDC forecasts, all new iPhone models will be equipped with 12 GB of RAM, as Apple seeks to avoid selling new devices that lack access to the full suite of Apple Intelligence features, CNBC reports. More advanced on-device AI features require more memory, and Apple’s new version of Siri will only work on newer devices. IDC estimates that approximately 54% of iPhones released since 2022 will not support the full functionality of the new version of Siri. This gives Apple the potential to set higher prices for iPhones based on more powerful hardware, rather than solely due to rising component costs. IDC forecasts that the average price of Apple products will rise by 12% this year, driven in part by a broader product lineup and the expected launch of a foldable iPhone.

The growth of the AI industry has led to a surge in the cost of memory chips and data storage devices. Since last year, prices for dynamic random-access memory (DRAM) and flash memory (NAND) chips have quadrupled after Google, Microsoft, Amazon, and Meta announced significant increases in spending on AI infrastructure development. Memory manufacturers are shifting their production toward the server segment, which is limiting supply for the consumer electronics market.

This shortage may persist through 2027. Although DRAM production capacity is expected to increase by about 30%, a significant portion of the new capacity will be directed toward the production of memory for AI, according to a Morgan Stanley forecast. As a result, supply for consumer electronics will fall short of demand by about 15%.

This article was AI-translated and verified by a human editor