Apple has increased the starting prices of its MacBook and iPad models by 20 to 42 per cent globally, including in India, primarily due to rising memory chip costs. The new price list on Apple India’s website reflects a roughly 20 per cent increase for MacBook Pro models built on the M5 series chip. The 14-inch MacBook Pro with the M5 Pro chip now costs Rs 2,99,900, up from its launch price of Rs 2,49,900.
Sharp price rise for iPad Air
The basic model of the 13-inch iPad Air saw the steepest increase, rising 41.22 per cent to Rs 1,19,900 from Rs 84,900 at launch. Counterpoint Research Co-founder and VP for Research Neil Shah noted that Apple’s price hikes for the MacBook Neo, MacBook Air, MacBook Pro, iPad Air, and iPad Pro Wi-Fi follow the biggest change in the cost structure of the consumer and enterprise PC and tablet market, shaped by rising semiconductor chip pricing from memory to processors.
Apple statement on unprecedented challenge
Apple said in a statement that the consumer electronics industry faces an unprecedented challenge. “The rapid expansion of AI data centres has created an extraordinary surge in demand for memory and storage. We have never seen a component price increase this much, this quickly. We have shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products, including today’s increases for iPad and Mac. We know this is not welcome news, and we are working tirelessly to find solutions,” the statement said.
Industry-wide price increases
Price increases for consumer electronics are already widespread across the industry, with many products rising by 40 per cent or more. Memory companies have been allocating an increasing share of their production to AI data centres, leaving the consumer electronics segment with constrained availability and rising costs. Memory suppliers are reporting margins at historic highs. Memory chip leader Micron reported 86 per cent gross margins, up from 15 per cent in just the past year.
Supply chain pressures
CyberMedia Research VP - Industry Research Group Prabhu Ram said, “Apple, long regarded as the industry’s benchmark for supply chain resilience, has begun passing higher component costs on to consumers. That is a strong signal that pricing pressures have reached a level that even the most sophisticated absorption strategies cannot fully offset.”
Neil Shah added that Apple held the price increase for at least two quarters, protecting its user base from any price inflation, but it has reached a point beyond which Apple could absorb the cost increase. “The unprecedented AI infrastructure growth has changed the semiconductor supply chain, driving insatiable demand for DRAM, NAND and Compute chips, not matching up to the capacity to produce and supply to other markets as AI infrastructure is prioritised. We believe the situation is not going to be better at least for the next two years,” he said.
Potential impact on demand
Shah noted that the timing of the price increase is not ideal as Apple looks to push its revamped on-device Apple Intelligence later this year across devices demanding considerable memory and compute capabilities uplift. “This could likely affect overall demand for Apple products in the coming months. However, this could also be a positive for Apple, especially for customers who are due for an update and want to buy a new Mac or iPad and can’t delay the purchase, they will not compromise by paying extra for a lower configuration, instead buy a more premium version of Apple’s portfolio. So, the market could shift towards the premium market as users look to get maximum value for the dollar spent,” Shah said.
