Tech giants Apple and Microsoft raise prices due to rising semiconductor costs

Apple and Microsoft have implemented price increases for several of their best-selling products, citing rising costs of memory chips used in artificial intelligence (AI) applications.

In the United States, Apple has raised prices across its range of Macs and iPads. The base model MacBook Air now retails at $1,299, up from $1,099, while the lowest-spec MacBook Pro is priced at $1,999, a 17% increase from $1,699. Similarly, the iPad Air’s base price has increased to $749, up from $599, and the iPad Pro’s starting point is now $1,199, up from $999.

The Mac Studio M3 Ultra desktop computer saw the largest price hike among Apple’s products, jumping from $3,999 to $5,299. Microsoft has also raised prices for its Xbox gaming console, with the 512 GB model increasing by $100 and the 1 TB model by $150.

According to an Apple spokesperson, the rapid expansion of AI data centers has led to a surge in demand for memory and storage, resulting in significant price increases. The company stated that it had previously shielded consumers from these rising costs but now needs to adjust prices accordingly.

Microsoft attributed its price increase to the same factors, citing a doubling of console storage and memory prices over the past several months. The company expects another doubling by 2027.

The price hikes have affected Apple’s stock price, with a decline of more than 6% following the announcement. Consumer tech analyst Trevor Long believes that these increases will impact Apple’s sales, particularly for products like the MacBook Neo, which was previously seen as an excellent value due to its competitive pricing.

Source: Al Jazeera