Apple has raised the prices of its iPads and MacBooks by as much as 25 per cent, acknowledging that it can no longer shield customers from the skyrocketing cost of memory and storage chips.
The price increases spare the iPhone, still the company's biggest earner. However, the MacBook Neo, Apple's entry-level laptop, has seen its starting price jump from $599 to $699, just months after its launch. This move blunts much of the pricing advantage that made it a disruptive proposition in the market.
The company's decision to raise prices indicates that even Apple, with its significant supply-chain muscle, is not immune to the memory price surge affecting the entire hardware sector.
The research firm IDC forecasts a steep decline in the global smartphone market this year, with shipments expected to fall close to 14 per cent. The PC market is also forecast to shrink by 11.3 per cent. According to IDC's latest analysis, the memory crisis is the single biggest factor dragging shipments lower, with average selling prices being pushed to record highs despite fewer devices being sold.
The root of the problem lies upstream, where memory makers such as Micron have prioritized orders from AI chipmakers like Nvidia, leaving little supply for phone, tablet, and laptop manufacturers. This has led to a significant increase in prices for these devices.
Apple has acknowledged the situation, stating, "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."
The price increases are widespread, with a MacBook Air with 512 gigabytes of storage climbing 18 per cent, from $1,099 to $1,299, and the MacBook Pro with 1 terabyte of storage rising by a similar margin, from $1,699 to $1,999. An iPad Air with 128 gigabytes of storage has seen the sharpest jump, up over 25 per cent from $599 to $749.
Apple had warned about the impending price increases, citing "significantly higher" memory costs that would start to catch up by the end of this month. Chief executive Tim Cook was blunt about the road ahead, stating, "Beyond the June quarter, we believe memory costs will drive an increasing impact on our business."
The underlying shock is extraordinary, with the price of dynamic random access memory, or DRAM, rising by as much as 98 per cent in the first quarter of this year and set to climb by a further 58 to 63 per cent this quarter, according to market research from TrendForce.
This so-called RAMageddon has been driven by the boom in AI data centre construction, with Nvidia and its peers signing long-term deals to lock in supply. Micron has secured $22 billion in such long-term commitments, a sum that underlines how much capacity is being diverted away from consumer devices and towards the AI build-out.
Ben Bajarin, chief executive of the technology consulting firm Creative Strategies, sees little relief on the horizon, stating, "The memory environment is tough and remains structurally tough for the foreseeable future. We had already had signals Apple would need to raise prices, and with their supply chain as good as anyone, there is concern the rest of the industry may have to raise prices even more than Apple."
The timing of the price increases is awkward for Apple, as the MacBook Neo had helped underpin a bullish sales forecast for the June quarter. The company has now surrendered a meaningful chunk of its price advantage over rivals, and the era of steadily cheaper computing power may be on pause for now.
