Readers were warned as early as late January to front-run the coming memory shortage by purchasing their favorite electronics, whether PCs, laptops, TVs, smartphones, or anything else dependent on high-end memory chips, as unprecedented data-center demand was already beginning to emerge.
Fast forward nearly five months, and just two weeks after Apple CEO Tim Cook warned that "price increases are unavoidable" for laptops and other devices, a Wall Street Journal report has confirmed that those hikes have now been passed along, potentially delivering sticker shock to customers.
Here's what happened earlier: The Apple Online Store briefly went down, and when it came back online, prices for Mac computers jumped 15% to 20%, while iPad prices increased 15% to 25%.
The company briefly took down its Apple Online Store early this morning as it typically does when announcing new products. When it came back online, the price tags for Mac computers rose roughly 15% to 20% and iPad prices rose 15% to 25%. Among the price increases, the base MacBook Air rose $200 to $1,299; the base MacBook Pro increased $300 to $1,999; the entry-level MacBook Neo increased $100 to $699. The iPad Air increased $150 to $749 and the iPad Pro increased $200 to $1,199. -WSJ
Vision Pro became even more unaffordable.
However, iPhone prices remained unchanged, but the company told the outlet in a statement that additional price hikes could be on the way.
"We have now reached a point where we need to begin raising prices," Apple said in the statement. "We have never seen a component price increase this much, this quickly."
An Apple spokesperson placed the blame on the "rapid expansion of AI data centers, which has created an extraordinary surge in demand for memory and storage," and this is why component prices surged.
Earlier this month, Cook told WSJ that price increases had become "unavoidable" because of higher component costs, adding, "There's less supply at a time when consumers want devices, and the memory guys are passing along huge price increases."
Apple has historically revealed price hikes with new launches of iPhones, iPads, and other devices, making this overnight price hike extraordinarily rare.
The high-end chip market is dominated by US-based Micron and South Korea's SK Hynix and Samsung, which have all seen massive demand for high-bandwidth memory from AI "hyperscalers" such as Google, Meta, and Amazon.
Apple's price hikes come hours after Micron delivered blowout quarterly earnings, touting gross profit margins that topped 80%. Shares soared nearly 18% in premarket trading.
Micron executives told investors that "tight conditions" will persist beyond 2027 and that only suggests further price hikes are coming not just for Apple but also for other major big tech firms that sell devices.
Micron Chief Business Officer Sumit Sadana said in a WSJ interview last night that "a couple of the customers who were being very aggressive with pricing at that time were not constructive," without naming Apple...
Sadana noted, "A lot of the industry investments got shut down in 2023 because of really poor pricing and really poor margins."
A recent Morgan Stanley note found that memory prices have climbed sixfold over the past year, with new manufacturing capacity likely to take years to build and ramp up.
The iPhone price hike may be unavoidable: JPMorgan analysts estimate DRAM and NAND could jump from roughly 10% to 15% of an iPhone's total component cost today to more than 45% by 2027.
Memory price spikes are already showing up in the Producer Price Index for semiconductor and other electronic component manufacturing.
... and at what point does President Trump start raging at memory prices, just as his administration has successfully sent oil prices crashing by entering a diplomatic phase with Tehran to secure a permanent peace deal?