Why some Apple products will cost hundreds of dollars more
Apple is increasing prices on some of its popular products, including iPads and MacBooks, with the company's online store reflecting the new costs Thursday.
In a statement, Apple attributed the price spike to an increase in AI data centers and higher demand for "memory and storage."
"The consumer electronics industry is facing an unprecedented challenge. The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage. We have never seen a component price increase this much, this quickly," the company said.
It continued, "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, including today's increases for iPad and Mac. We know this is not welcome news, and we are working tirelessly to find solutions."
AI companies have been buying up memory chips to train and run AI models, leading to a supply shortfall. Prices on consumer electronics have increased as a result, with the chips now significantly more expensive due to higher demand.
The price of an 11-inch iPad Air now starts at $749, up from $599, while an 11-inch iPad Pro will now cost $1,199, a $200 increase from its previous price of $999.
The price of a budget MacBook Neo, meanwhile, is up $100 to a starting price of $699. A 13-inch MacBook Air will set consumers back $1,299, up $200 from its previous price, while the 14-inch MacBook Pro now costs $1,999, $300 more than before.
The price of iPhones has not changed for now.
Apple CEO Tim Cook, who will step down from his role in September, previously told The Wall Street Journal about the new price hikes, calling them "unavoidable" and a "flood" of epic proportions.
Cook specifically cited the skyrocketing price of memory and storage chips, which he said had been threatening Apple's profit margins.
"This is a 100-year flood," Cook said at the time. "I've never seen anything like it in any area in over 40 years."
"There's less supply at a time when consumers want devices and memory guys are passing along huge price increases," he continued. "We definitely need memory pricing and supply to return to reasonable levels for consumer products. That's the bottom line."
The rise of AI in recent years has fueled a surge in demand for memory chips, a key building block for the technology.
Over the years, the chip supply chain has become highly specialized, and only three suppliers currently make the memory chips Apple uses.
