Apple raises product prices amid AI chip shortage

U.S. technology giant Apple has significantly increased the prices of several of its major products due to the rapidly growing global demand for artificial intelligence (AI). The company says the sharp rise in the cost of memory and storage chips has forced it to make this decision.

According to a Reuters report, Apple stated that the number of AI data centers being built around the world has increased rapidly driving demand for memory and storage chips to record levels. With supply unable to keep pace with demand, the prices of these critical components have continued to rise. Under Apple’s revised pricing:

• The 14-inch MacBook Pro has increased in price from $1,700 to $2,000.
• The iPad Air now costs $750, up from $600.
• The Apple TV streaming device has risen from $130 to $200.

However, Apple has not changed the price of the iPhone, its best-selling product and largest source of revenue. According to analysts, the company decided to keep iPhone prices unchanged to maintain consumer purchasing power and remain competitive in the smartphone market.

An Apple spokesperson said that the rapid expansion of AI infrastructure has placed enormous pressure on the memory and storage chip industry. The company had absorbed the additional costs in the past but the current market conditions have made that approach unsustainable. Following the price hike announcement, investors reacted cautiously.

Apple’s stock fell by more than 4.7% at the start of trading. The company is also expected to undergo a leadership transition. Current Chief Executive Officer Tim Cook is expected to be succeeded by John Terns on September 1 while Apple is also expected to unveil its next-generation iPhone later that month.

Industry analysts believe that if the expansion of AI data centers and supporting infrastructure continues at its current pace, the prices of other electronic products could also increase in the coming months due to rising component costs.