Prices for technology products that once steadily declined over time are now rising, reversing a long-standing trend familiar to consumers. Apple and Microsoft have both announced significant price increases on tablets, laptops, and even gaming consoles that have been on the market for several years, citing supply chain pressures linked to the growing demand for artificial intelligence (AI) technologies.
At the heart of these price hikes is a surge in the cost of essential components, especially memory chips like RAM, which have become increasingly scarce. This shortage, driven by the exponential growth of AI data centers requiring vast computational resources, has led to what some industry insiders term "Ramageddon." The demand for memory far exceeds supply, pushing prices up sharply and creating a ripple effect across consumer electronics.
Apple raised prices for its tablets and laptops by nearly 20%, a move followed by Microsoft’s announcement of another Xbox Series S and X console price hike. This latest increase adds at least $100 to consoles that are already five years old and marks the third price rise in just over a year. The result is that these consoles now cost up to 40% more compared to the previous year. Consumer backlash has been swift, with many expressing frustration over affordability on social media platforms.
This pattern extends beyond Apple and Microsoft. Nintendo has declared it will increase the global price of its upcoming Switch 2, while Valve raised the price of its new Steam Machine gaming PC and recently increased the cost of its handheld Steam Deck by 40%. Each company points to soaring component costs as the explanation, signaling a broad industry-wide challenge.
Experts link these supply shortages to the artificial intelligence boom, where compute-hungry AI infrastructure is monopolizing chip production. Counterpoint Research’s principal analyst called the memory shortage the most disruptive supply-side event the smartphone industry has ever faced. Although flagship smartphones like the iPhone have largely avoided price rises so far, the investment costs for AI appear to be pressuring other devices more directly.
Stock markets also reacted negatively, with Apple’s share price dipping after its price increase announcement amid broader concerns that heavy AI investment could suppress consumer demand for new gadgets. As AI’s influence on chip allocation intensifies, consumers may face higher prices for a growing range of electronics in the near term.