Apple raises prices of iPads and MacBooks as AI Boom drives up memory chip costs

Apple has announced price increases across several of its popular products, including iPads and MacBooks, citing a sharp rise

Apple has announced price increases across several of its popular products, including iPads and MacBooks, citing a sharp rise in the cost of memory and storage chips driven by the rapid expansion of artificial intelligence (AI) technologies. The company confirmed the changes on Thursday, saying soaring component prices have made it impossible to absorb the additional costs any longer.

The latest price hikes do not affect the iPhone, Apple’s best-selling product and biggest source of revenue. However, industry analysts believe the smartphone could also become more expensive in the near future if supply pressures continue.

In a statement, Apple acknowledged that the cost of key components has climbed at an unprecedented rate. “We have never seen a component price increase this much, this quickly,” the company said. “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 iPads and Macs.”

Apple attributed the surge in costs to the rapid growth of AI data centres, which require enormous amounts of advanced memory and storage chips. The increasing demand from AI developers has tightened global supplies, leaving consumer electronics manufacturers with fewer available components and significantly higher prices.

Among the products affected, the entry-level Mac laptop, known as the Neo, will now start at $600 instead of $599. Meanwhile, the price of a MacBook Air with 512GB of storage has increased by $200, while a MacBook Pro equipped with 1TB of storage now costs $300 more than before. Apple has also raised prices for its HomePod smart speakers and Apple TV streaming devices.

The announcement had an immediate impact on financial markets. Apple shares dropped nearly 5%, while Dell’s stock fell more than 8%, reflecting broader concerns about rising manufacturing costs across the technology sector. Despite the decline, analysts noted that Apple’s long-standing supplier relationships have helped it manage cost increases better than many of its competitors.

The current supply crunch stems from memory manufacturers prioritising orders from AI chip giants such as Nvidia. Companies including Micron have shifted production toward high-demand AI customers, generating record profits while leaving limited supplies for smartphone and PC makers.

Although iPhones have escaped the latest round of price increases, experts believe that may not last for long. Nabila Popal, Senior Research Director at IDC, said, “The iPhone isn’t spared. Its price increase is coming.” She added that Apple’s decision to announce higher prices before its annual autumn iPhone launch appears strategic, allowing the company to focus attention on new features rather than higher prices during the product unveiling.

The cost of dynamic random access memory (DRAM), a critical component used in nearly every modern electronic device, has risen dramatically. Prices surged by as much as 98% during the first quarter of 2026 and are expected to climb another 58% to 63% in the current quarter. Industry experts have even nicknamed the crisis “RAM-ageddon” due to its widespread impact on electronics manufacturers.

Micron recently revealed it has secured $22 billion in long-term supply agreements with AI-focused customers seeking guaranteed access to memory chips.

Apple is not the only company responding to rising production costs. Microsoft has also announced global price increases for its Xbox consoles, with hikes ranging from $100 to $150 beginning August 1. In the United States, the Xbox Series S will cost $500, while the Xbox Series X will rise to around $800. Other gaming companies, including Sony and Nintendo, have also adjusted prices in response to higher component costs.

Analysts expect these price increases to weigh on consumer demand throughout 2026. Research firm IDC forecasts that global smartphone sales could experience their steepest annual decline on record, falling nearly 14%, while PC shipments are projected to decrease by more than 11% as manufacturers and consumers grapple with rising costs driven by the AI hardware boom.