Apple and Microsoft Raise Prices on iPads, MacBooks and Xbox Consoles Amid Memory Chip Shortage

Apple and Microsoft raised prices Thursday on iPads, certain MacBook models and Xbox consoles. @CBSNews reported the increases stem from higher costs for memory and storage chips driven by demand from AI data centers. Government inflation data show prices for computer software and accessories rose more than 14 percent over the past year, while prices for personal computers, tablets and related hardware increased 1.3 percent.

Memory chip prices have climbed 100 to 200 percent compared with six or twelve months earlier. Micron Technology, Samsung Electronics and SK Hynix are the largest memory chip makers. Micron abandoned consumer chip production last year to focus on AI-related demand.

Alphabet, Amazon, Meta and Oracle are buying chips for AI data centers at premium prices. Francisco Jeronimo, vice president for data analytics at IDC, told @CBSNews that hyperscalers are purchasing entire production capacity at premium prices and that HBM chips are more profitable than DRAM and NAND chips used in consumer devices.

He described the shortage as way worse than pandemic disruptions, with no remaining stock.

Wedbush Securities estimates there are 15 times as many memory chip orders from tech companies as available chips. Building a new fabrication facility costs $10 billion and takes up to five years. Gartner forecasts PC prices will rise 17 percent this year from 2025 levels and smartphone prices will rise 13 percent.

Analysts predict the shortage will last at least through 2027. Nabila Popal of IDC said Apple's recent price hikes were higher than expected and that iPhone Pro and Pro Max prices could rise by as much as $200. Dan Ives of Wedbush Securities advised consumers to purchase devices now before further increases, especially ahead of the holiday season.