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Apple and Xbox price hikes
Apple raised prices across its Mac and iPad lines, saying the consumer electronics industry is facing an "unprecedented challenge" due to an "extraordinary surge" in demand for chips to power AI data centres.
“Apple (NASDAQ:AAPL | AAPL Price Prediction) became the focal point of a CNBC investment-committee debate after the company raised prices across its Mac, iPad, HomePod, and Vision Pro lines to offset surging memory and storage chip costs”
In Apple’s statement, the company said, "We have never seen a component price increase this much, this quickly," and it added that it was working to find solutions while it began raising prices on products including iPad and Mac.
The BBC reported that the iPhone maker hiked some prices by almost 20%, while Microsoft-owned Xbox also raised the price of its popular gaming console for the second time in less than a year.
Xbox said its basic console would go up by $100 (£75) to $499 and a console with more memory would go up by $150 to $749, with new prices taking effect from August.
The BBC also tied both companies’ moves to a broader components crisis, noting that memory and storage costs have already more than doubled and that Xbox expects them to double again by 2027.
What Apple said, and what investors watched
Apple framed the price increases as a response to AI-driven demand, telling CBS News, "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 iPad and Mac.
CBS News reported that Apple would raise prices of certain MacBooks and iPads by up to $300, while Reuters was cited for the detail that the iPhone price increases were not announced.
The BBC reported that tech analyst Paolo Pescatore said Apple’s price rises showed the "AI boom was now affecting consumer electronics," and it quoted market research firm Counterpoint’s David Naranjo expecting other PC and tablet brands to follow.
In a separate take on the market reaction, 24/7 Wall St. said Apple’s stock sank 6.2% on Thursday, June 25, after Apple pre-announced Mac price increases of 15-20% and iPad increases of 15-25%.
24/7 Wall St. also reported that Polymarket traders assigned a 93.6% probability that Apple would finish the week above $270, but only a 45.0% chance it would close above $280.
Supply-chain pressure and next moves
Apple’s price changes were tied to memory and storage chip costs, with ABC News quoting Microsoft’s view that console storage and memory prices have increased by more than 2.5x and that it expects another doubling by the fall of 2027.
“Apple's rare mid-cycle hardware price increases pushed the stock lower on June 25, but Wall Street's early response stayed largely upbeat as analysts kept their ratings and targets unchanged”
ABC News also said Apple attributed the price spike to an increase in AI data centers and higher demand for "memory and storage," while it reported that the price of a budget MacBook Neo rose $100 to $699.
In Canada, CBC News reported that Apple’s statement said it could no longer shield customers from soaring memory and storage chip costs driven by the AI industry’s data centre buildout, and it quoted Apple saying, "We have never seen a component price increase this much, this quickly."
CBC News added that Statistics Canada’s consumer price index showed prices for computer equipment, software and supplies rose 3.9 per cent in May, with the federal agency saying demand from AI data centres and limited production capacity contributed.
Looking ahead, 24/7 Wall St. framed the key question as whether higher prices will hurt demand, while it noted that Apple trades at roughly 36 times earnings and that its 200-day moving average continues to provide an important technical support level.
