Apple and Microsoft have implemented steep price increases on some of their best-selling products, blaming soaring memory chip costs driven by the artificial intelligence (AI) boom.

On Thursday, Apple raised prices across its Mac and iPad lines, with many popular models seeing hikes of 20% or more. The base MacBook Air now retails in the US for $1,299, up from $1,099, while the entry-level MacBook Pro rose from $1,699 to $1,999.

The iPad Air base price increased from $599 to $749, and the iPad Pro jumped from $999 to $1,199. The steepest increase was on the Mac Studio M3 Ultra desktop, which rose 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.” They added, “The rapid expansion of AI data centres has created an extraordinary surge in demand for memory and storage. 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 in April last year.

Analyst Trevor Long expects the price increases to affect Apple’s sales. “Some products, like the MacBook Neo, were outstanding because of price. This hits that hard,” he said.

Microsoft also cited rising chip prices in announcing a $100 and $150 increase on the 512 GB and 1 TB models of its Xbox console, respectively. The company noted that console storage and memory prices have increased by more than 2.5x, with expectations of another doubling by fall 2027.

Source: www.aljazeera.com