Forget the Apple tax, this is the AI tax

Apple raised prices up to 25% across Macs and iPads due to soaring memory costs driven by AI infrastructure demand. Analysts warn of further iPhone price hikes and a new normal of higher electronics prices through 2030 as memory supply fails to catch up.

Apple’s decision to raise prices in response to memory cost increases https://www.computerworld.com/article/4189546/apple-raises-hardware-prices-ai-is-to-blame.html is not unique to the company. If Apple has to do it https://www.computerworld.com/article/4186730/apple-scrambles-to-handle-component-price-hikes.html , everyone else will as well. Apple announced stiff price increases Thursday — up to 25% in some cases — that extended across most products, including refurbished Macs and iPads which saw prices increase up to $330 . Apple might have left iPhones out of the mix for now, but they’ll likely see price increases when new models appear this fall. Omdia believes the memory price crisis spells the end of low-cost smartphones https://www.applemust.com/omdia-says-the-hammer-has-fallen-on-low-cost-smartphones/ . “We had assumed a price hike of $100 to Pro and ProMax iPhones, and $50 hike to base models,” wrote IDC Senior Director Nabila Popal. “However, seeing the price hikes to iPads and Macs going as high as $300 for some models, my personal instinct says the hike to iPhones may be even higher than what we assumed — perhaps even $200 to the Pro/Pro Max models. I think the days of $50 price increases are over.” What’s driving all this? The answer, increasingly, is AI. The buildout of large language model LLM infrastructure requires vast quantities of high-bandwidth memory https://www.applemust.com/apple-turned-memory-price-hikes-into-competitive-advantage-analyst/ and that appetite is accelerating faster than manufacturers can respond. Will Apple suffer? Maybe, though perhaps not too much. Popal notes that the introduction of Siri AI will give a large number of existing users a reason to upgrade. Given most of these devices are sold on installment plans, even a $200 price increase over 36-months might not pose a major barrier to sales. IDC expects iPhone sales to decline, but only by 5% — while the rest of the industry shrinks. This may not be the worst of it. Major players now warn that the supply-demand gap could continue to widen in the coming years. The higher costs that result will spread across all types of electronic devices, so anything with memory, a processor, or storage will become more expensive. Microsoft announced its own price increase, adding up to $150 to the cost of Xbox this week. And Lenovo made its own contribution when it warned that high memory prices will become the new normal https://wccftech.com/lenovo-warns-high-memory-prices-are-the-new-normal/ into 2030, and prices might never return to early-2025 levels. Micron, Samsung, and SK Hynix describe the situation as beyond their control, saying they’re having difficulty meeting demand even for their top customers. These companies are generating massive profits all the while. In Lenovo’s case, the company claims that while it is introducing additional manufacturing capacity, this is not making a dent in the supply-demand imbalance. SK Hynix is expected to expand its manufacturing capability https://www.computerbase.de/news/arbeitsspeicher/lenovo-ueber-dram-preise-es-wird-nie-mehr-wie-letztes-jahr.98057/ by accelerating its original 2040 expansion plans to 2030, at which time it should have tripled output; even that might be insufficient to meet demand. “We currently do not have line of sight as to when memory supply will be able to catch up with increasing demand,” Micron CEO Sanjay Mehrotra said this week https://investors.micron.com/static-files/631b1a32-5537-46ae-8f40-82e42fc79dfe . With no end in sight, Wedbush Securities analyst Dan Ives says he believes Apple is attempting to get ahead of the inflationary spiral https://youtu.be/W8oMHy-MDE8?si=D1yvB9VDJlI6Mvpb , speculating that the latest price increases bake future increases into their model. Memory prices began to spiral out of control last fall, with prices today reaching levels no one anticipated. They rose as much as 98% in the first quarter of 2026 and are set to jump by another 58% to 63% in the current quarter, according to TrendForce https://www.trendforce.com/presscenter/news/20260601-13070.html . This consequential uncertainty is affecting tech stocks. Asian stock markets fell sharply on Friday, led by a sell-off in technology firms. Trading on South Korea’s Kospi was temporarily suspended as a result — for the third time this week. Apple shares are down again, and the sell-off is expected to continue. The beneficiaries of this memory squeeze are not hard to identify. While consumers face higher prices for phones, laptops and games consoles, the companies driving memory demand — the hyperscalers and AI firms building out server farms at extraordinary scale — are posting record revenues. The costs flow down; the profits flow up. Some, including Naomi Klein https://naomiklein.org/video-how-ai-is-draining-our-real-world-naomi-and-paris-marx/ , see it as a kind of strip mining of human intellect and ingenuity, a cultural wealth transfer in which human innovation is packaged and resold as competing chatbots, for a fee. There are signs this may not be sustainable https://www.computerworld.com/article/4187825/the-trillion-dollar-ai-hallucination.html . A UBS Group survey https://news.futunn.com/en/post/75068082/ubs-group-finds-60-have-already-started-curbing-ai-spending finds approximately 60% of companies have started curbing AI spending because of token costs, shifting to low-cost and open-source models. But even if AI-driven memory demand softens, there is little reason to expect consumer tech prices to follow. History suggests they rarely do. For Apple watchers, it was pleasant enjoying a few months in which the dream of a sub-$500 Mac https://www.computerworld.com/article/4180406/after-a-quick-1-1m-sales-macbook-neo-set-to-reshape-the-pc-industry.html was realized, only for that happy reverie to be dashed https://www.applemust.com/the-core-apple-tldr-june-25/ by the VC-funded race to deploy AI server farms for the benefit of those with pockets deep enough for the tokens to feed them. Please join me on social media at BlueSky, LinkedIn, or Mastodon, even better, please subscribe to The Core for your daily collection of human-curated Apple News.