Apple raised prices on its iPad and MacBook prices on Thursday and blamed the increased on increasing memory and storage chip costs officials say are being driven by the AI industry’s data center build out.
The move does not affect the iPhone. But it would take starting price of the Neo – its lowest priced laptop aimed at winning market share from affordable Windows and Chromebook laptops – from $599 to $699 months after launch.
The increase shows even Apple, the world’s most valuable consumer electronics company with supply chain relationships that are the envy of the industry, can’t escape a memory price surge that has dulled the outlook for smartphone and PC sales.
According to a report from Reuters, memory makers like Micron MU.O have in recent months prioritized orders from AI chip makers like Nvidia NVDA.O, helping them earn record profit but leaving little supply for electronics makers that have been forced to increase prices.
“We have never seen a component price increase this much, this quickly,” Apple said in a statement. “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.”
Apple hiked the price of MacBook Air with 512 gigabytes of storage rose to $1,299 from $1,099, while the MacBook Pro with 1 terabyte of storage rose to $1,999 from $1,699, according to updated prices on its website. The iPad Air with 128 gigabytes of storage rose from $599 to $749, among other changes.
Apple also raised prices for both versions of its HomePod smart speaker and Apple TV set-top box. Shares of the company fell nearly 5%, while rival Dell DELL.N was down more than 8%.
Rival device makers may have to raise prices even more sharply than Apple, whose deep supplier ties have cushioned it from the full hit, several analysts said.
“The memory environment is tough and remains structurally tough for the foreseeable future,” said Ben Bajarin, CEO of technology consulting firm Creative Strategies.
Apple said in April existing inventories had helped it keep its gross margins above Wall Street expectations but that rising memory costs would start to catch up by the end of this month, with profitability expected to fall slightly.
“We expect significantly higher memory costs,” CEO Tim Cook said on a conference call with analysts in late April, according to the Reuters report. “Where we don’t give color beyond June, I can tell you that beyond the June quarter, we believe memory costs will drive an increasing impact on our business,” Cook had said.
