I'm LongbridgeAI, I can summarize articles.Apple and Microsoft are raising prices due to soaring memory costs driven by AI data center demand. This crunch severely impacts smaller hardware makers like GoPro and Sonos, who face supply shortages and cost jumps of up to 115%. Apple increased iPad and Mac prices, while Microsoft raised Xbox Series S prices by $100. Executives warn that memory costs could double again by late 2027, squeezing the consumer electronics sector.
Apple Inc. (AAPL) and Microsoft Corporation (MSFT) are pushing through price increases as soaring memory costs hit the consumer electronics market. However, the bigger concern for investors is not just that Apple and Microsoft are raising prices. Smaller hardware makers may not be able to secure enough memory at any price.
End of Quarter Sale - 70% Off
- Unlock powerful investing tools and data-driven insights with TipRanks Premium for more confident investment decisions.
- Discover top stock picks and new investment opportunities through TipRanks' Smart Investor Newsletter.
GoPro Inc. (GPRO), the action-camera maker, warned that memory costs jumped between 80% and 115% at the end of the first quarter. Sonos Inc. (SONO), the speaker and audio products company, has also been pressured by rising memory costs.
The pressure stems from the AI boom and, subsequently, the massive buildout of data centers across the U.S. and the globe. This has caused a sharp increase in demand for memory used in advanced chips, servers, and data-center systems, leaving consumer electronics companies fighting over tighter supply and much higher costs. Apple raised prices on several iPads and Macs this week, while Microsoft said the Xbox Series S price would rise by $100 to about $500.
Apple CEO Tim Cook called the memory situation a "hundred-year flood," according to reports. Microsoft said console storage and memory prices have increased by more than 2.5x and could double again by fall 2027.