Apple Expands Price Hikes Amid Rising Chip Costs as Xbox Also Increases Console Pricing

Apple is raising the prices of MacBooks and iPads globally as a result of rising memory and storage chip costs.

The iPhone manufacturer has increased the prices of certain laptops and tablets by nearly 20%, citing an unprecedented challenge for the electronics industry caused by an extraordinary surge in demand for chips powering AI data centres.

“We have never observed such a rapid and substantial rise in component prices,” the company remarked, noting that it is actively seeking solutions.

Shortly after Apple’s announcement, Xbox announced that it would significantly increase the price of its popular gaming console for the second time in under a year, attributing the move to the ongoing “components crisis”.

The Microsoft‑owned company disclosed on Thursday that the price of its entry‑level console will increase by $100 (£75) to $499, and that a higher‑memory model will rise by $150 to $749; the new pricing will become effective in August.

Earlier, Xbox had raised console prices in October by $20‑$70, which meant new consoles were 30% to 40% more costly than they were a year earlier.

The company stated that it had “hoped another price increase would not be required”, yet it blamed escalating storage and memory costs for necessitating higher consumer prices.

“The entire consumer electronics industry is grappling with the current components crisis, but the impact is especially pronounced for consoles,” Xbox added.

The company further noted that although memory and storage costs have already more than doubled, they are projected to double once again by 2027.

This suggests that Xbox may be positioned to raise prices further.

Apple’s and Xbox’s price adjustments follow a series of firms raising device prices to offset growing hardware expenses.

Analyst Paolo Pescatore remarked before the Xbox price hike was announced that Apple’s price increases demonstrate that the AI boom is now influencing consumer electronics.

Much of the price increase for memory and storage components — especially DRAM, a type of computer memory — has been linked to the proliferation of data centres required to power the AI boom.

Experts argue that this imbalance between supply and demand is compelling all market participants to bear higher costs.

The world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC), has also indicated that inflation is driving up its operating costs.

In a BBC interview earlier in June, Wendell Huang of TSMC — which manufactures chips for companies such as Nvidia, AMD and Apple — said it could implement its own price increases amid rising costs.

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