Apple Announces Major Price Increases for MacBook & iPad Amid AI Chip Shortage
In a shocking development that led to a more than 6% drop in its stock, Apple declared significant price hikes across its Mac and iPad product lines on Thursday. This marks the company’s most dramatic pricing shift in recent years. The immediate price increases are a result of soaring memory and storage chip costs, driven by the AI industry’s insatiable demand for semiconductors.
The MacBook Air now starts at $1,299, up from $1,099, while the MacBook Neo has jumped to $699, up from $599. iPad prices have also seen a rise, with increases ranging from $150 to $300 across various models. The price hikes affect a wide range of products including the MacBook Pro, iPad Air, iPad Pro, Mac mini, Mac Studio, HomePod mini, and Apple TV. However, the iPhone, Apple Watch, and AirPods have been exempted from these increases.
“We have never seen a component price increase this much, this quickly,” Apple stated, highlighting that memory chipmakers have been prioritizing AI data center orders, thereby straining the supply of consumer electronics. CEO Tim Cook had previously warned in a Wall Street Journal interview that price increases were becoming “unavoidable.” The announcement led to a sell-off that wiped out roughly $265 billion in Apple’s market value in a single session, although the company’s total market cap still remains above $4 trillion.
Following Apple’s announcement, Microsoft also declared that it would be raising prices on its Xbox consoles starting August 1, citing similar pressures from memory costs.
Source: NBC News — Apple’s shares plunge after it hikes prices on iPads and laptops