Apple and Microsoft Raise Product Prices as Global Chip Shortage Bites Hard

Both tech giants blame an AI-driven memory chip crisis for pushing up prices on popular devices from MacBooks and iPads to Xbox consoles leaving consumers to bear the cost.

The Price Shock No One Saw Coming

Apple and Microsoft have both announced sharp price hikes on some of their most popular products pointing to a worsening global memory chip shortage tied to the explosive growth of artificial intelligence.

Apple moved first on Thursday bumping up prices across its entire Mac and iPad lineup. Many of its best-known models saw increases of 20 percent or more. The base MacBook Air now costs $1,299 in the United States up from $1,099. The entry-level MacBook Pro climbed from $1,699 to $1,999. Meanwhile, the iPad Air jumped from $599 to $749. The iPad Pro rose from $999 to $1,199. Apple’s newer MacBook Neo model now starts at $699 previously priced at $599.

The steepest jump belongs to the Mac Studio M3 Ultra desktop leaping from $3,999 to $5,299 in one shot.

Apple Says It Held Back as Long as It Could

Apple acknowledged that it had tried to absorb rising chip costs shielding buyers from price hikes for as long as possible. But the company said it had “reached a point where we need to begin raising prices.” An Apple spokesperson explained the pressure behind the decision: “The rapid expansion of AI data centres has created an extraordinary surge in demand for memory and storage.” The company added “We have never seen a component price increase this much, this quickly.”

The market reacted sharply. Apple’s stock tumbled more than 6 percent following the announcement its worst single-day drop since US President Donald Trump unveiled his “liberation day” tariffs back in April last year.

Analysts Warn of Rough Road Ahead for Apple

Trevor Long a consumer technology analyst based in Australia said the price hikes will almost certainly dent Apple’s sales numbers. “Some products, like their newest product, the MacBook Neo, while excellent as products, were also outstanding because of price,” Long said. “This hits that hard. They are still a decent deal but push closer to other competitive product prices as well.”

Long sees the next twelve months as a genuine test for Apple and other top-tier tech companies. He noted that the next iPhone launch will be the biggest moment of truth. “The key thing will be the next iPhone and how close they can price it to the last one,” he said. “I’d expect a $50-150 price rise across the range, depending on models.”

Microsoft Follows With Xbox Console Price Hikes

Microsoft didn’t hold back either confirming price increases on two versions of its Xbox gaming console. The 512 GB model rises by $100. The 1 TB version goes up by $150. The Redmond, Washington company blamed the same chip crisis gripping the wider electronics industry.

“We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options,” Microsoft said in a statement. But the numbers made it unavoidable. “Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027,” the company warned. Microsoft summed up the broader pain felt across the sector “The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles.”