Apple and Microsoft are raising prices on various devices and consoles, citing increased costs of crucial components driven by demand from AI development. This shift marks a significant change in a market where consumers have traditionally expected older devices to decrease in price over time.
Apple has announced a nearly 20% price increase on its tablets and laptops, while Microsoft plans to raise the cost of its Xbox Series S and X consoles by at least $100 starting in August.
This adjustment represents Microsoft’s third price hike in just over a year, resulting in new consoles being 30% to 40% more expensive than they were at this time last year.
Consumer reactions have been mixed, with some expressing frustration on social media. One user on X remarked, "Xbox with another hardware price increase? I gotta laugh to keep from crying," while another suggested that Xbox should cancel its upcoming console, Helix, due to affordability concerns.
Yang Wang, a principal analyst at Counterpoint Research, described the current memory crisis as the most disruptive supply-side event the smartphone industry has ever faced. Although the iPhone has not yet experienced price hikes, analysts believe the broader tech sector is feeling the impact of rising costs, particularly in the context of AI investments.
Other companies are also adjusting their prices in response to the component shortages. Nintendo plans to raise the price of its Switch 2 globally starting in September, while Valve recently launched a new Steam Machine gaming PC at a higher-than-expected price.
The company had previously raised the cost of its handheld Steam Deck by 40% due to similar component issues.
Analysts attribute these price increases to a surge in demand for memory chips, particularly RAM, which has seen prices more than double between October 2025 and early 2026.
Danni Hewson from AJ Bell noted that the race to build AI data centers is driving up demand for chips, allowing manufacturers to increase prices as customers compete for production capacity.
