Apple warns of rising costs as AI-fueled chip shortage bites

Apple has increased prices for several iPad and MacBook models, citing a sharp rise in memory and storage chip costs fueled by the rapid expansion of artificial intelligence data centres, Reuters reports.

The price hikes, announced on June 25, do not affect the iPhone lineup but will impact a range of other consumer devices. Among the most notable changes is the MacBook Neo, Apple's entry-level laptop designed to compete with affordable Windows and Chromebook devices. Its starting price has risen from $599 to $699 just months after its launch.

The move underscores the growing strain that soaring memory costs are placing on the broader technology industry, including companies with highly sophisticated supply chains.

"We have never seen a component price increase this much, this quickly," Apple said in a statement. "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."

According to updated pricing on Apple's website, the MacBook Air with 512GB of storage now costs $1,299, up from $1,099, while the MacBook Pro with 1TB of storage has increased to $1,999 from $1,699. The iPad Air with 128GB of storage now starts at $749, compared with its previous price of $599. Apple also raised prices for both versions of its HomePod smart speaker and its Apple TV streaming device.

Shares of Apple fell nearly 5% following the announcement, while rival PC maker Dell declined more than 8%.

Industry analysts attribute the cost pressures largely to memory manufacturers prioritizing supply for AI-related infrastructure projects. Companies such as Nvidia have secured significant memory allocations for data center expansion, tightening supply for consumer electronics producers.

"The memory environment is tough and remains structurally tough for the foreseeable future," said Ben Bajarin, chief executive of technology consulting firm Creative Strategies.

Apple had previously warned investors that rising memory costs would begin affecting profitability. During an earnings call in April, Chief Executive Officer Tim Cook said, "We expect significantly higher memory costs."

According to market research firm TrendForce, prices for dynamic random access memory (DRAM), a critical component in most modern electronic devices, surged by as much as 98% during the first quarter of 2026 and are projected to rise a further 58% to 63% in the current quarter.

Analysts now expect Apple to eventually raise iPhone prices as well. "The iPhone isn't spared, its hike is coming," said IDC research director Nabila Popal, adding that Apple strategically announced the latest increases ahead of its autumn iPhone launch.

The rising cost environment is expected to weigh heavily on global device sales. Research firm IDC forecasts the smartphone market will experience its largest-ever annual decline this year, while PC shipments are also expected to contract significantly.

By Vafa Guliyeva