Tech Giants Feel the Pinch: Apple and Microsoft Increase Prices Amid Soaring Chip Costs

The rising cost of memory chips has prompted Apple and Microsoft to increase prices on some of their most popular products. Apple has raised prices across its Mac and iPad lineup, with some models seeing hikes of 20 percent or more. The base model MacBook Air now starts at $1,299, up from $1,099, while the entry-level MacBook Pro has increased to $1,999 from $1,699. The iPad Air and iPad Pro have also seen significant price jumps, to $749 and $1,199, respectively.

Apple attributes the price increases to the surge in demand for memory and storage driven by the rapid expansion of AI data centers. The company says it can no longer absorb the rising chip costs and has been forced to pass them on to consumers. Microsoft has also cited rising chip prices as the reason for increasing the price of its Xbox gaming console. The 512 GB and 1 TB models will see price hikes of $100 and $150, respectively.

According to Microsoft, console storage and memory prices have increased by more than 2. 5 times and are expected to double again by the fall of 2027. The price increases are expected to impact sales, with consumer tech analyst Trevor Long predicting a challenging year ahead for leading tech players like Apple. The key to success will be how companies balance pricing with consumer demand, particularly with the upcoming release of new products like the next iPhone.

Source: Al Jazeera