Apple hikes prices on some products by nearly 20% while Xbox raises console cost
Apple increases prices of MacBooks and iPads worldwide rising memory and storage chip costs.
The iPhone maker has raised prices on some laptops and tablets by almost 20 percent and said the electronics industry was facing an “unprecedented challenge” due to an “extraordinary increase” in demand for chips that power AI data centres.
“We have never seen component price increases this fast, this quickly,” the company said, adding that it was working to find a solution.
Shortly after Apple’s announcement, Xbox said it had decided to significantly increase the price of its popular gaming console for the second time in less than a year due to the current “component crisis.”
The Microsoft-owned company said on Thursday that the price of its base console will rise by $100 (£75) to $499, while the price of a console with more memory will rise by $150 to $749. The new prices will be valid from August.
Xbox previously increased the price of its consoles by $20 to $70 in October; This means the price of a new console will be 30% to 40% more expensive than this time last year.
The company said it “hopes another price increase will not be necessary” but blamed rising costs on console storage and memory for the need to raise prices to consumers.
“The entire consumer electronics industry is struggling with the current component crisis, but the effects are particularly hard on consoles,” Xbox said.
The company added that although the cost of memory and storage has already more than doubled, it expects costs to double again by 2027.
This apparently leaves the door open for Xbox to raise prices even further.
Apple and Xbox’s price increases come after a number of companies increased prices for their devices to help them cover rising hardware costs.
Commenting before the Xbox price increase was announced, technology analyst Paolo Pescatore said Apple’s price increases show that “the AI boom is now affecting consumer electronics.”
Much of the rising prices for memory and storage components (especially Ram, a type of computer memory) is attributed to the proliferation of data centers needed to power the AI boom.
Experts say this leads to an imbalance between supply and demand, which means everyone has to pay more.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker, also said that inflation increases the cost of doing business.
Speaking to the BBC at the beginning of June, Wendell Huang from TSMC, which produces chips for companies such as Nvidia, AMD and Apple, did not ignore his own price increases in the face of increasing costs.
