Apple and Microsoft are raising their prices as chip costs soar

Apple on Thursday said it is raising prices on MacBooks and iPads, blaming AI-driven demand for memory and storage that has sharply increased component costs.

“We have never seen a component price increase this much, this quickly,” the company said in a statement shared with CBS News. “We have 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 price hikes are impacting multiple Apple products, according to The Verge. The MacBook Neo, which Apple introduced earlier this year to appeal to budget-conscious customers at a starting price of $599, has increased to $699. 

Other changes include:

• MacBook Air 512GB: Now $1,299, up from $1,099
• MacBook Pro 1T: Now $1,999, up from $1699
• iPad Air 128GB: Now $749, up from $599

The price hikes don’t include the iPhone, Apple’s core product, according to Reuters. 

“Apple hasn’t announced what the iPhone price increases will be, but they are surely coming,” Nabila Popal, senior director of data and analytics at International Data Corporation, a market intelligence and advisory firm, said in an email. “The storm isn’t over yet; this is just the beginning. iPhones are the biggest revenue driver for Apple, so they are saving that announcement for later.”

Apple shares tumbled after the company’s announcement, falling $16.49, or 5.6%, to $276.68, in midafternoon trading.

The rapid expansion of AI data centers has heightened demand for computing power, exacerbating a chip shortage. 

In December, the International Data Corporation said the memory market is at an “unprecedented inflection point” and predicted the chip shortage could last “well into 2027.”

The shortage has had a knock-on effect on everyday tech, including personal computers, which are seeing higher prices for the first time in decades.

In an exclusive interview with the Wall Street Journal on June 17, Chief Executive Tim Cook said the company is doing its best to shield customers from price hikes but said, “the situation has become unsustainable.”

“I’ve never seen anything like it in any area in over 40 years,” he told the Journal.