Why Apple's tech has become more expensive: The price of developing artificial intelligence?

Apple, which had long been known for relatively stable pricing on its products, has recently noticeably raised the cost of many devices. According to Bloomberg columnist Mark Gurman, this is an inevitable "price to pay for the AI era."

Reasons for the price increase

The sharp rise in the cost of Macs, iPads, and other devices is linked to shortages and higher prices for key components. Large-scale investments by major companies in AI development have led to enormous demand for graphics processors, memory, and storage. Data centers and AI developers are actively buying up these components, creating shortages and increasing production costs for the entire industry.

As a result of the price revision:

• MacBook Neo is up 17%
• MacBook Air is up 18%
• Base iPad is up 29%
• iPad Air is up 25%
• Some home devices are up more than 50%

Apple tried to hold back price increases for several months but was ultimately forced to raise them to maintain its financial performance.

Apple's AI strategy

Interestingly, the company initially bet on performing AI tasks directly on the user's device (on-device AI) rather than in the cloud. However, recently Apple has been more actively using cloud infrastructure, particularly for the updated Siri voice assistant.

Gurman notes that price increases have affected not only computers and tablets. The Apple TV became 54% more expensive, the HomePod mini — 30%, and the Vision Pro headset — 6%. In his opinion, this may be related to the preparation of new versions of devices with expanded AI capabilities and increased memory.

Long-term consequences

The expert believes that the current component price increases are not temporary. He draws an analogy with the early 2000s, when mass purchases of flash memory for the iPod led to a long-term rise in market prices. Today's situation with AI components, in his view, could become the "new normal" for the entire industry.

So far, iPhone prices have not changed, but Gurman does not rule out increases later this year.

In brief

The price increases for Macs, iPads, and other Apple devices have resulted from a sharp rise in component costs due to the AI boom. Large-scale purchases of chips and memory by major AI companies have led to shortages and higher production costs. Apple held prices back for a long time but was ultimately forced to revise them. According to Mark Gurman, this is a long-term trend that could affect future iPhones as well.