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Apple: Apple moved Thursday to pass rising component costs directly onto consumers, announcing price increases across its MacBook and iPad product lines.
The move marks the company's first formal step to offset surging memory and storage expenses, which CEO Tim Cook has described as unavoidable.
Apple's online store briefly went offline Thursday morning before returning with the updated pricing.
The increases range from $100 to $300 depending on the model. Here is a breakdown of the new prices:
The MacBook Neo entry model rises from $599 to $699. The MacBook Air 512GB moves up from $1,099 to $1,299. The MacBook Pro 1TB sees the steepest jump, climbing from $1,699 to $1,999. On the iPad side, the iPad Air 128GB increases from $599 to $749, while the iPad Pro Wi-Fi 256GB goes from $999 to $1,199.
Wall Street Reacts Sharply
Apple shares dropped more than 6% on Thursday following the announcement — the steepest single-day decline since April 2025.
Investors reacted negatively to what analysts view as a sign that the company can no longer insulate its margins from broader supply chain pressures.
Apple Points to AI Infrastructure as the Culprit
In an official statement, Apple attributed the price hikes to an industry-wide component crisis fueled by artificial intelligence expansion.
The company pointed to surging AI infrastructure buildout as the primary driver, noting it has never witnessed component prices rise so sharply in such a short period.
Apple acknowledged that it had held off as long as possible. The company stated it had shielded customers from these increases up to this point but has now reached a stage where raising prices on a number of products has become necessary.
Apple also left open the possibility of additional hikes in the future. "We know this is not welcome news, and we are working tirelessly to find solutions," the company added.
Cook Calls It a 'Hundred-Year Flood'
Cook had signaled the price increases were coming during an interview with The Wall Street Journal last week.
Cook described the situation as a "hundred-year flood," saying he has never encountered anything like it in more than 40 years in the industry.
Cook said Apple is prepared to use its cash reserves to help boost memory supply, though he ruled out building the company's own memory and storage facilities.
He also called on U.S. policymakers to consider easing restrictions on American companies sourcing from Chinese memory and storage suppliers.
Memory Prices Have Quadrupled
According to Counterpoint Research, memory and storage prices have quadrupled over the past three quarters as chip suppliers have redirected production toward the high-bandwidth memory required for AI server farms.
The memory crunch has proven highly profitable for suppliers such as Micron, which reported a fourfold revenue increase and saw its gross margin surge from 39% a year ago to 84.9% in the most recent quarter — a figure that surpassed both Nvidia and Meta.
Analysts Expect iPhone Prices to Follow
Counterpoint Research director Tarun Pathak estimates the component cost increase could add approximately $200 per iPhone for Apple.
He projects price increases of roughly $150 to $200 across the iPhone lineup, with steeper hikes expected on higher-memory configurations.
IDC expects all new iPhone models to move to 12GB of RAM as Apple works to ensure new devices can fully support its Apple Intelligence feature suite.
More advanced on-device AI capabilities demand greater memory, and Apple's revamped Siri experience will only function on newer hardware.
IDC estimates that around 54% of iPhones shipped since 2022 will not support the complete new Siri experience.
That dynamic gives Apple a strategic rationale to frame future price increases around enhanced hardware capabilities rather than simply rising input costs.
IDC projects Apple's average selling price will climb 12% this year, supported by a stronger product mix and the anticipated launch of a foldable iPhone.
Apple's Broader Pricing Playbook
Apple's longstanding pricing approach has typically involved discontinuing the lowest-cost configuration, elevating storage or memory as the new baseline, or directing buyers toward Pro models and higher-capacity versions.
The Mac mini provided an early indication of this shift. In May, Apple removed the entry-level $599, 256GB configuration from its lineup, with the lowest available model then starting at $799.
Counterpoint analyst Tarun Pathak noted that the growing demand for AI infrastructure has fundamentally altered the memory supply chain, making higher bill-of-materials costs an enduring challenge rather than a temporary disruption.
He expects other PC and tablet makers to respond by raising their own prices, trimming entry-level options, or shifting focus toward premium AI-capable devices.
Visual Disclaimer: This is an AI-generated illustrative portrait. It is used for creative representation and does not depict a real-time event. Created by AD News Live.
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