Apple hikes Mac and iPad prices amid soaring chip costs

Apple announced on Thursday that it is raising prices on its MacBooks and iPads, attributing the increases to a surge in component costs. The company cited the escalating demand for memory and storage, largely driven by artificial intelligence applications, as the primary reason for the sharp rise in component prices.

"We have never seen a component price increase this much, this quickly," Apple stated in a message shared with 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 a number of products, including today's increases for iPad and Mac."

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We have never seen a component price increase this much, this quickly. 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.

The price adjustments affect several Apple products. For instance, the MacBook Neo, initially launched at $599, will now start at $699. Other notable increases include the MacBook Air 512GB, now priced at $1,299 (up from $1,099), and the MacBook Pro 1TB, which rises to $1,999 (from $1,699). The iPad Air 128GB also sees a price hike, now costing $749, up from $599.

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The storm isn't over yet; this is just the beginning. iPhones are the biggest revenue driver for Apple, so they are saving that announcement for later.

Notably, the price increases do not currently include the iPhone, Apple's most significant revenue generator. Nabila Popal, a senior director at International Data Corporation, suggested that Apple is likely delaying iPhone price increase announcements. "The storm isn't over yet; this is just the beginning," Popal commented via email. "iPhones are the biggest revenue driver for Apple, so they are saving that announcement for later."

Following the announcement, Apple's shares experienced a decline, falling by $16.49, or 5.6%, to $276.68 in mid-afternoon trading. The broader tech industry is grappling with increased chip costs, exacerbated by the rapid expansion of AI data centers, which intensifies the demand for computing power and contributes to a persistent chip shortage. Analysts predict this shortage could extend well into 2027.

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I've never seen anything like it in any area in over 40 years.