Apple and Xbox Raise Prices on Devices Amidst Chip Shortage

Apple is increasing the price of MacBooks and iPads worldwide due to rising memory and storage chip costs.

The iPhone maker has hiked the prices of some laptops and tablets by almost 20%, saying the electronics industry is facing an "unprecedented challenge" due to an "extraordinary surge" in demand for chips to power AI data centres.

"We have never seen a component price increase this much, this quickly," the company said - adding it was working to find solutions.

Not long after Apple's announcement, Xbox said it had decided to significantly raise the price of its popular gaming console for the second time in less than a year due to the current "components crisis".

The Microsoft-owned company said on Thursday that the price of its basic console will go up by $100 (£75) to $499, while the price of a console with more memory will go up by $150, to $749. New prices will take effect from August.

Xbox previously hiked the price of its consoles in October by $20-$70, meaning the price of a new console will be 30% to 40% more expensive than it was this time last year.

The company said it had "hoped another price increase would not be necessary", but blamed the rising cost of console storage and memory for needing to raise prices on consumers.

"The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles," Xbox said.

The company added that while the cost of memory and storage has already more than doubled, it expects the costs to double again by 2027.

That seemingly leaves the door open for Xbox to further raise prices.

Apple's and Xbox's price hikes follow a slew of firms increasing device prices to help them absorb rising hardware costs.

Commenting before the Xbox price increase was publicised, tech analyst Paolo Pescatore said Apple's price rises showed the "AI boom was now affecting consumer electronics".

Much of the increased prices for memory and storage components - particularly Ram, a form of computer memory - have been attributed to a proliferation of data centres needed to power the AI boom.

This, experts say, has caused an imbalance between supply and demand which means everyone has to pay more.

The world's largest chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC), has also said that inflation is pushing up the cost of doing business.