Consumer electronics are becoming more expensive even when the products themselves are several years old, reversing the familiar pattern of ageing devices gradually falling in price.
Apple and Microsoft are among the latest companies to raise hardware prices, citing sharp increases in the cost of memory and storage components. Manufacturers are competing with AI data centre operators for the chips used in laptops, tablets, consoles, smartphones and servers.
Apple and Microsoft Raise Hardware Prices
Apple increased prices across several Mac and iPad models, with some products rising by close to 20%. The company said the consumer electronics industry was facing an unprecedented increase in memory and storage costs as AI infrastructure demand expanded.
Microsoft followed with another round of Xbox price increases, effective worldwide from August 1. The 512GB Xbox Series S will rise by $100, while the 1TB Series S and Series X models will become $150 more expensive.
The changes mean the five-year-old Xbox Series X with a disc drive will cost $800, up from $649. Microsoft will also discontinue its 2TB model.
Nintendo has announced a smaller increase for the Switch 2, raising its US price from $449.99 to $499.99 beginning September 1. The company attributed the change to market conditions expected to continue over the medium to long term.
AI Servers Compete for the Same Components
Generative AI systems require data centres filled with processors, storage equipment and large quantities of high-bandwidth memory. As technology companies accelerate construction, chipmakers are directing more production capacity toward customers willing to sign large, long-term supply agreements.
Consumer devices use different configurations from AI servers, but both depend on DRAM and NAND Flash. DRAM provides short-term working memory, while NAND stores files even when a device is switched off.
Counterpoint Research reported that memory prices increased by 80% to 90% in the first quarter of 2026 compared with the previous quarter. Some 32GB DDR5 PC memory components reportedly rose from $94 during the third quarter of 2025 to $282 by the first quarter of 2026.
Higher memory costs are increasing the share of each product’s bill of materials devoted to storage and working memory. Premium manufacturers may be able to absorb some of the increase, but lower-priced devices operate on narrower margins.
Chip Suppliers Benefit From Tight Supply
The shortage has produced strong results for memory manufacturers. Micron reported quarterly revenue of $41.46 billion, compared with $9.3 billion a year earlier.
Chief executive Sanjay Mehrotra said AI had made memory a strategically important part of modern computing infrastructure. The company is increasing manufacturing investment, but does not expect supply conditions to improve quickly.
Inflation, tariffs and geopolitical disruption may also be contributing to higher electronics prices. However, the rapid expansion of AI infrastructure has changed which customers receive priority and how much manufacturers must pay to secure components.
Analysts expect tight supply to continue into 2027 or 2028. Until additional manufacturing capacity becomes available, buyers may face higher prices, fewer discounts and longer waits for devices that once became cheaper with age.
Featured image credits: Magnific.com
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