Apple Announces Price Hikes of ~20%: iPad and Mac Lead the Way as Storage Cost Pressure Is 'Unprecedented'

On June 25, a The Paper reporter learned that due to the continuous surge in memory and storage chip costs, Apple has officially announced price increases for iPad and Mac product lines. Apple stated in a statement: "The consumer electronics industry is facing unprecedented challenges. The rapid expansion of AI data centers has led to a surge in storage demand. We have never seen component prices rise at such magnitude and speed. We have been absorbing cost pressures internally, but we now have to start raising prices on multiple products, including the iPad and Mac announced today."

According to Apple's China website, the MacBook Neo starting price has been raised from RMB 4,599 to RMB 5,499 (up 19.5%), the MacBook Air from RMB 8,499 to RMB 9,999 (up 17.6%), the 14-inch MacBook Pro from RMB 13,499 to RMB 15,999 (up 18.5%), and the iPad Air from RMB 4,799 to RMB 5,999 (up 25%).

This is not just Apple's predicament, but a collective pressure the entire consumer electronics industry is experiencing. Since the AI computing boom, storage chip capacity has been heavily squeezed by data centers, and price increases in end-consumer electronics due to cost pass-through have become common, with some categories seeing price hikes of over 40%. As an industry benchmark, Apple has been trying to maintain stable retail prices, but continuously rising costs have broken through the tipping point of internal absorption.

Earlier this month, Apple CEO Tim Cook had already signaled this during an exclusive interview with The Wall Street Journal. The executive, who has deep expertise in supply chain management for over 40 years, described the current storage supply-demand imbalance as a "once-in-a-century flood" and made it clear that Apple's long-standing strategy of absorbing cost increases internally is no longer sustainable.

Outside observers predict that pricing for new products such as iPhones in the second half of the year may be fully adjusted upward, and the consumer electronics industry is about to enter a new price cycle.

The root cause of this round of price increases lies in the AI arms race's siphoning effect on storage capacity. To meet the massive demand for large model training and inference, memory manufacturers are increasingly prioritizing a larger proportion of capacity for data centers, leading to supply constraints and rising prices in the consumer electronics sector. Deutsche Bank warns that as more consumer electronics and home appliance manufacturers passively pass through costs, a "memory inflation tax" is emerging on end consumers.

At the same time, storage manufacturers' profits have soared dramatically due to the supply-demand imbalance. Micron Technology disclosed in its latest earnings report that its mobile business gross margin has reached 86%, compared to just 15% only a year ago. The soaring chip profits contrasted with the price increase pressure faced by end brands forms the most striking contradiction in this round of industry chain competition.

Originally from: Apple Announces Price Hikes of ~20%: iPad and Mac Lead the Way