Apple Raises Prices of Macs and iPads, CEO says Shortage of Chips Due to A.I. Boom

On July 25, Apple increased the prices of MacBooks and iPads. CEO Tim Cooks stated that this was due to the bigger demand for memory (RAM) and storage (NAND) chips.

He explained in an Wall Street interview that because of the increased demand for AI chips from the AI boom, chips used in common devices has a shortage and has an price increase, which is still expected to climb. Cooks added that Apple has tried to “shield” their customers from this issue, but it has come to a point where Apple would be “unsustainable,” leading to the dramatic price increases.

The price increases differentiated for each product: the MacBook Pro now costs $1999, previously being $1699. The recently released MacBook Neo was $599, currently being $699. An iPad Air went from $150 to $749, and the iPad Pro is now $1199 after being only $200 before.

According to the Guardian, artificial intelligence companies have requested more chips to use for development and tests for their A.I. systems. These chips are more expensive and complicated than those used in devices for memory and storage. Chip manufacturers are focusing on producing more A.I. chips, leading to less RAM and NAND chips, which costs have increased costs fourfold since the A.I. boom, forcing Apple and other technology-selling companies (i.e. Microsoft) to increase their products’ prices.

While it is unusual for Apple to increase prices this suddenly and in this season without releasing anything new, Nabila Popal, a senior research director at IDC, said that it was, “strategic for Apple to make the price hike announcements prior to the iPhone fall launch, so the headlines at launch is not the price hikes but the value the new phones bring.”