1/7/26

Apple increases MacBook and iPad prices by 20%

iPhone maker blamed cost rises on memory chip shortages caused by AI boom

Series

Author

This article is republished from The Financial Times

Apple has increased the price of MacBooks and iPads by about 20 per cent worldwide, one of the broadest price rises in its history, as the iPhone maker blamed memory chip shortages caused by the AI infrastructure boom.

The $4.3tn US tech giant said on Thursday that the consumer technology industry was facing an “unprecedented challenge”, with memory prices rising so quickly that it would have to pass the costs on to customers.

Apple chief executive Tim Cook had warned last week that price increases this year would be “unavoidable” because of the “unsustainable” cost of memory and storage.

But it has so far stopped short of raising prices for the iPhone, Apple’s blockbuster product that still accounts for about half of its revenue.

“The rapid expansion of AI data centres has created an extraordinary surge in demand for memory and storage,” Apple said. “We know this is not welcome news, and we are working tirelessly to find solutions.”

The decision to substantially increase the cost of its entire line of laptop and tablet products is likely to unsettle investors.

Apple has historically announced targeted price rises with the launch of new generations of devices, often limiting them to specific models or dropping cheaper models outright. A uniform overnight price increase across two major product lines is rare for Apple.

Prices across Apple’s iPad and MacBook line-up have increased in the region of 20 per cent. The 512GB MacBook Air, for example, has gone from $1,099 to $1,299, while the iPad Pro 256GB has gone from $999 to $1,199. The MacBook Neo, Apple’s lower-cost laptop launched in March, has jumped by 25 per cent, from $599 to $749.

“So far Apple has been able to shield customers by absorbing much of the [memory and storage] cost increases, which are continuing to rise to unprecedented levels,” Apple noted on Thursday.

By Apple’s own account, the memory crunch triggered by the AI infrastructure boom is proving more disruptive to its supply chain than any other crisis in the past few years. Apple defied expectations it would raise prices late last year in the aftermath of President Donald Trump’s tariff war. It also avoided price increases during the Covid-19 pandemic, which led to the massive factory complexes of Apple supplier Foxconn in China being shut for months.

The iPhone maker joins a growing list of consumer technology companies that have raised the prices of their products citing the memory shortfall this year. Laptop makers Dell, HP, Lenovo and Asus have already flagged similar price increases, while Samsung raised the price of two models of its new S26 smartphone in the US by $100.

Investors have increasingly questioned how Apple, the world’s most valuable consumer electronics brand, will navigate the soaring price of DRam and Nand memory.

Its efforts to bring more chip production in-house, and its ability as a dominant customer to squeeze other suppliers in its chain, have been seen as potential ways for it to offset the impact without passing the costs on to consumers.

The DRam market is dominated by US company Micron and South Korea’s SK Hynix and Samsung, all three of which have surpassed $1tn valuations this year as they profit from the massive demand for advanced high-bandwidth memory from AI “hyperscalers” such as Google, Meta and Amazon.

With finite manufacturing capabilities, these three top suppliers have pivoted to prioritise high-bandwidth memory over traditional consumer memory. Micron on Wednesday reported a 15-fold increase in quarterly profits, with margins in excess of 80 per cent. Its shares were up 16 per cent in pre-market trading on Thursday.

Nand memory suppliers such as California’s Sandisk and Japan’s Kioxia have also seen their shares soar since the start of the year.

Apple has been exploring the option of turning to Chinese memory suppliers YMTC and CXMT, but has faced pushback from US policymakers including secretary of state Marco Rubio, citing security risks.

A Morgan Stanley study this month found that memory prices had increased sixfold in the past year, with new manufacturing capacity taking “years to build, quality and ramp”. It said this “chipflation” was the direct result of AI hyperscalers squeezing out traditional buyers in the consumer memory space.

This year, JPMorgan analysts estimated that DRam and Nand would go from around a 10 to 15 per cent share of the total “bill of materials” for the components in an iPhone, to more than 45 per cent by 2027.A

pple still managed to grow the margin on its hardware products in the March quarter, rising to 38.7 per cent compared with 35.9 per cent the year before. It reported $29.6bn in total profits for the quarter.

‍