Apple Price Increases Could Mean 3 Years of Costlier Devices

Apple’s recent price increases could be a harbinger for a years-long era of costlier electronics.

That’s according to a report Wednesday (July 1) from Kiplinger, which says a memory crunch it had warned of in March has only made smartphones and PCs more expensive.

The largest shift in the consumer electronics market so far, the report said, has come from Apple’s recent price hikes. The tech giant has raised prices on laptops and tablets between 17% and 30% this year, with higher iPhone prices likely for this year as well.

Apple CEO Tim Cook has blamed the increases on surging memory chip costs, saying he’s never witnessed anything like it in 40 years, the report added.

“We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable,” Cook told the Wall Street Journal last month.

The company’s most recent price increase came last week, with the cost of Macs increasing between 15% and 20%, and iPads climbing 15% to 25%, thanks to the skyrocketing costs of components used to power these devices.

“Tight memory supply, due to immense AI infrastructure demand, has pushed prices 3-4 times higher than they were at the end of 2024, with further rises likely,” William Kerwin, an analyst at Morningstar, wrote in a recent research note, per Kiplinger.

“Memory has accounted for about 10% of an iPhone’s cost, but inflation threatens to raise the cost of building an iPhone by 20% or more.”

The report notes that AI infrastructure is monopolizing the manufacturing capacity at memory chip makers, leaving much less capacity for consumer electronics. And AI will receive priority treatment over consumer products as new manufacturing capacity comes online.

It’s also not clear when the memory price hikes will end, the report added, citing a recent article from IDC analyst Soo Kyoum Kim.

“The supply-demand imbalance is expected to persist beyond 2027 in key segments,” Kim wrote, while Kerwin projected that memory inflation would “continue through 2028.”

Meanwhile, Reuters reported in early May that computers and electronics orders saw their best month in 25 years during March, a trend attributable to rise to soaring demand for these products as companies invest in AI.