Tech giants Apple and Microsoft have significantly raised prices on some of their best-selling products, citing rising chip costs triggered by rapid growth in the field of artificial intelligence.
Apple has increased prices across its entire Mac and iPad line, with most popular models seeing increases of 20 percent or more. The company stated that it had shielded consumers from rising chip costs until now but has reached a point where it must begin raising prices.
Notable price hikes on Apple products
In the US market, the price of the base model MacBook Air has risen from $1,099 to $1,299, while the entry-level MacBook Pro has increased from $1,699 to $1,999. The starting price of the iPad Air has gone from $599 to $749, and the iPad Pro from $999 to $1,199.
Apple's entry-level MacBook Neo model has risen from $599 to $699, while the steepest price increase occurred on the Mac Studio M3 Ultra desktop computer. The price of this model jumped from $3,999 to $5,299.
An Apple spokesperson said in a statement, "The rapid proliferation of AI data centers has created an extraordinary surge in demand for memory and storage. We have never before seen a component price increase of this magnitude and at this speed."
Microsoft raises Xbox prices
Microsoft also announced it had raised the prices of its 512 GB and 1 TB Xbox console models by $100 and $150 respectively, citing rising chip prices. The tech giant, based in Redmond, Washington, stated, "We were hoping another price increase wouldn't be necessary and have been working with suppliers on options over the past few months."
Microsoft noted that console storage and memory prices have more than doubled and expects them to increase further by autumn 2027. The company assessed, "The entire consumer electronics industry is battling the current component crisis, but the effects are being felt particularly harshly on consoles."
Market reaction and analyst comments
Apple's stock price fell more than 6 percent following the price hikes. This was the sharpest decline seen since US President Donald Trump announced "Liberation Day" tariffs last April.
Australian consumer technology analyst and commentator Trevor Long said he expected the price increases to affect Apple's sales. Long said, "Some products like the MacBook Neo stood out not only as excellent products but also for their pricing. This price hike hits them directly. They are still a reasonable option but are moving closer to the prices of other competing products."
Long said he expects the coming year to be tough for leading tech players like Apple, adding, "The critical thing will be the next iPhone and how closely they can price it to its predecessor. I expect a price increase of between $50 and $150 across the series, depending on the model."
