Apple hikes prices as memory chip costs skyrocket

Yahoo Finance ·

STORY::: Apple Apple is hiking prices as the cost of memory chips skyrockets. Its lowest priced laptop will jump from $599 to $699, with iPad prices also rising. For now at least, the iPhone is unaffected. Apple says it can no longer avoid passing on rising costs to consumers. The price of memory chips jumped by around 98% in the first quarter, and has continued to soar ever since. That is driven by the boom in AI data centers. Companies like Nvidia have signed big deals with chipmakers, leaving consumer electronics firms scrambling to secure supplies. Apple said it had never seen component prices increase so much, so quickly. While iPhones weren’t hit by Thursday’s move, analysts say it’s only a matter of time before they too face price increases. Apple shares fell almost 5%, while Dell dropped 8%. Some industry watchers say Apple’s rivals may have to do even bigger price increases, as they lack the Mac maker’s deep ties to suppliers. Research firm IDC says the global smartphone and computer markets will both see sharp contractions this year due to the rising prices.

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Apple raised prices on products such as notebooks and iPad, citing a surge in memory chip prices; the low-end notebook was increased from $599 to $699. Memory prices rose about 98% in Q1, with AI data-center demand and large contracts from firms like Nvidia cited as main drivers. Apple has not applied the increase to the iPhone for now, but analysts expect upward pressure to spread to iPhone prices over time. The move is positive for semiconductor and equipment companies through improved revenue and margins, but it increases downside risk to consumer electronics and global demand, heightening the possibility of a contraction in the smartphone and computer markets.

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