Apple hikes prices on iPads, MacBooks, as AI crunches global memory chip supply
Apple hiked iPad and MacBook prices on Thursday, saying it could no longer shield customers from soaring memory and storage chip costs driven by the AI industry's data centre buildout.
“The consumer electronics industry is facing an unprecedented challenge,” Apple said in a statement to CBC News. “We have never seen a component price increase this much, this quickly.”
The company has shielded customers from increases thus far, it said. "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."
Random access memory, or RAM, is a critical component in most electronic devices. As AI companies race to build out data centres, Micron, Samsung and SK Hynix — the world’s major memory manufacturers — have pivoted more of their production capacity away from consumer memory.
They are now prioritizing orders from AI chipmakers like Nvidia, helping them earn record profit but leaving little supply for electronics makers that have been forced to reflect component costs in their products.
Apple’s MacBook Neo, its lowest-priced laptop, will now cost $949, up $150 from its previous price. The Education model will start at $819, up from its previous pricing at $679.
Apple also raised prices for both versions of its HomePod smart speaker and Apple TV set-top box, but the move does not affect its main cash cow, the iPhone.
“We've seen pretty dramatic price increases [across consumer products],” said Willy Shih, a professor of management practice at Harvard Business School.
“Historically, over the long term, memory prices have continued to go down. It's highly unusual to see memory prices actually go up,” he said. “I haven't seen anything quite like this.”
While companies typically forecast their production in advance and lock down suppliers through contracts, Shih said now, those supplies are running dry and products will have to reflect the true cost of its parts.
Prices for computer equipment, software and supplies rose 3.9 per cent in May, Statistics Canada’s latest consumer price index showed. The federal agency said the demand from AI data centres and limited production capacity have both contributed to the price increase.
Gaming consoles hit by RAM shortageApple isn’t the only tech company to point the blame at rising component costs.
This week, PC gaming company Valve launched its new product, Steam Machine, with its two-terabyte model priced at $1,919 — a higher price point than the company says it originally intended, citing the RAM shortage as a factor.
Steam Machine is composed of many PC components, Valve explained in a blog post on its website. The company said it first started sourcing those parts in 2023 and felt it had a good understanding of how component pricing would change over time, explaining that, typically, PC hardware becomes cheaper as new technology arrives.
“Over the past year or so, that has changed quickly and significantly, most visibly for RAM and storage components,” the post said.
“The overall effect is that our original goal for the price of Steam Machine is no longer viable. So the prices we're sharing today reflect the state of the world for manufacturing; or, more accurately, it reflects the price of the components as we've secured them over the past six months.”
Nintendo, XBox, PlayStation also take hitsWhile Valve’s latest hike is the most recent sticker shock to the gaming world, it isn’t the first.
In May, the company also increased the price of its Steam Deck products by more than 60 per cent, also attributing rising memory and storage costs. A one-terabyte OLED model cost $819 when it launched. Now, it’s priced at $1,349.
In a blog post earlier this month, signed by XBOX CEO Asha Sharma and Matt Booty, chief content officer, the company said “we are in a hardware component crisis,” adding that it expects another significant price increase in component parts this year, more than five times what the company paid for them just two years ago.
Last October, XBox raised its prices in the U.S., with its Series S models increasing by $20 US to $400 US and $450 US; the Series X increasing by $50 US to $600 US and $650 US; and the 2-terabyte Series X going up by $70 US to $800 US.
In April, PlayStation announced it was hiking the prices on its PS5 consoles, citing “continued pressures in the global economic landscape,” marking the second price increase from Sony in less than a year.
The standard PS5 went up $100 US to $649.99 US, while the price of the PlayStation Portal remote player climbed to $249.99 US from $199.99 US.
And as of Sept. 1, Nintendo’s Switch 2 will also be jumping up by $50 Cdn to $679.99. Company president Shuntaro Furukawa has also cited higher component costs, along with other factors including exchange rates and tariffs, having factored into Nintendo's decision.
RAM shortage expected through 2027: MicronMicron expects the memory and storage shortage to last at least through 2027.
“We expect tight conditions to persist beyond calendar 2027 as a result of AI-driven demand across all segments coupled with structural supply constraints,” Sanjay Mehrotra, Micron’s chair, president and CEO, said in an earnings call, Wednesday.
“Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.”
Manufacturers are building more chip factories to up production and meet the increased demand, Shih said, which may mitigate the price hikes once more supply comes online. That includes Micron’s U.S. expansion adding manufacturing capacity in Idaho, New York and Virginia.
cbc.ca
