The global memory and storage chips armageddon is forcing Apple to hike the prices of its Macs and iPads. In a statement, Apple attributed the extreme step to “the rapid expansion of AI data centres”, which has “created an extraordinary surge in demand for memory and storage”.
“We have never seen a component price increase this much, this quickly. 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,” the statement reads. iPhone prices were unchanged.
The shortage has been caused by unprecedented demand from AI companies. The prices of memory chips, known as DRAM, and storage chips, referred to as NAND, have both quadrupled in the past year, according to research firm TechInsights, which projects that prices will continue to rise into next year.
One or both are integral components inside smartphones, PCs, cars and many consumer devices.
“Apple held it off for at least two quarters, protecting its user base from any price inflation, but it has reached beyond the point where Apple could absorb the cost increase. The timing is not ideal as Apple looks to push its revamped on-device Apple Intelligence later this year across devices, demanding a considerable uplift in memory and compute capabilities,” Neil Shah, research vice-president at technology market research firm Counterpoint Research, told The Telegraph.
He also pointed out that the “market could shift towards the premium segment as users look to get maximum value for the dollar spent. This could significantly improve the mix of Apple products and offset the potential decline in units with the value”.
Apple CEO Tim Cook hinted at incoming price changes during an interview with The Wall Street Journal earlier this month. The MacBook Neo, launched in March at ₹69,900, is now priced at ₹79,900.
“Price increases of 40 per cent or more are already visible across consumer electronics categories. Even Apple — the industry benchmark for supply chain resilience — has begun passing costs to consumers, a signal that pricing pressure has reached a threshold that absorption strategies can no longer contain. For OEMs with less supply chain sophistication, the impact is more pronounced,” said Prabhu Ram, vice-president of industry research at CyberMedia Research.
He said: “As memory suppliers prioritise higher-margin AI contracts, consumer electronics face constrained availability and sustained cost pressure. Micron’s latest reported gross margins of 86 per cent, against 15 per cent a year ago, quantify the scale of this reallocation.”