Apple and Microsoft announced price increases on their flagship hardware products Thursday, citing an unprecedented semiconductor crisis ironically fueled by the artificial intelligence technology both companies are racing to dominate.
Apple's price hikes took effect immediately on select MacBook and iPad models, with increases reaching up to $300 on certain configurations. Microsoft announced Xbox console prices will climb by $100 to $150 starting August 1, marking the company's third hardware price adjustment in less than a year.
The Apple increases are substantial. The MacBook Neo jumped from $599 to $699. The iPad Pro Wi-Fi 256 GB model went from $999 to $1,199, a $200 bump.
Apple CEO Tim Cook indicated the company had been absorbing rising component costs for some time but reached a point where that was no longer sustainable.
Microsoft's Xbox situation is arguably more striking. A third price hike since late 2025 suggests the company is chasing a moving target on costs. The company is also discontinuing its 2 TB Xbox model entirely.
Investors were not thrilled with the Apple news. The company's stock dropped roughly 6% on the day of the announcement.
The semiconductor components driving these price hikes are memory chips and NAND storage, the same building blocks that AI data centers are consuming at an extraordinary rate. High-bandwidth memory, the type of chip inside AI accelerators, has seen demand explode alongside AI infrastructure spending. But fabrication plants that make these chips also share capacity with facilities producing consumer-grade memory.
Both Apple and Microsoft explicitly cited this dynamic in explaining their price adjustments.