Why is Apple asking me to pay more for Big Tech’s obsession with AI?

Tim Cook recently said the price increases were “inevitableHe described the company’s pricing as:UnsustainableThe 16-inch MacBook Pro saw its price rise by $300. The 11-inch iPad Air went from $599 to $749. Even the HomePod Mini got a bump from $30 to $129. Cook placed the blame squarely on the AI ​​industry, which isn’t surprising. Ramageddon It has already come to desktop PCs and gaming consoles. The price of the Xbox has seen a roughly 25 percent hike depending on the model, and it hasn’t canceled anything out until the phone’s full launch. Apple is the latest to raise prices and Point your finger at AI.

Rising prices are “basic economics,” says Tim Dierdinger, assistant professor of marketing and strategy at Carnegie Mellon University’s Tepper School of Business. As the technology industry races to win the AI ​​war, “the price of RAM has risen dramatically because memory manufacturers have reallocated their production lines to produce new HBM memory for AI data centers and away from consumer DDR5.” When the cost of components rises, companies tend to do so These costs are passed on to consumers.

But this is not a fluke or temporary supply chain problem. Companies are choosing data center customers over brick-and-mortar buyers because “the chip itself earns much more inside an AI server than it does inside a consumer device,” according to Srikanth Gajapathula, a professor of technology, operations and statistics at New York University’s Stern School of Business. Regardless of whether the people We are Screaming to More artificial intelligenceAnd more AI data centers or not.

Companies like OpenAI, Google, and Microsoft have spent unprecedented amounts of money, competing with companies like Apple for RAM and storage, and creating what even Sam Altman admitted was… bubble. This imbalance has led to record profits for companies such as: MicronWhich makes memory chips. “This shortage is not temporary and may extend into the next few years… Because the increase is permanent and not temporary, simply absorbing the cost is not a sustainable strategy,” says Gajapathula.

But Apple at least posted record profits four Quarters In a rowand her Footnotes Their hardware sales are well above the industry standard. Its brands are estimated To be between 30 and 40 percentdepending on the product. Technical insights and The Wall Street Journal It is estimated to be higher than that on the iPhone 17 Pro, and perhaps by the same amount 47 percent. according to The StreetMargins on smartphones typically range between… 15 and 25 percent. Data on laptop margins is difficult to come by, however Estimates Put it between 10 percent And 25 percent for most Industry.

Apple is actually among the last major tech companies to raise its prices. But why ask customers to foot the bill when Apple seems well-positioned to absorb those costs?

Ari Lightman, a professor of digital media and marketing at Carnegie Mellon University’s Heinz College, said it was difficult to reconcile Apple’s overall financials with Tim Cook’s description of its pricing as unsustainable. He said the price hike was “undoubtedly” aimed at appeasing shareholders who demand continued growth.

Lightman points out Apple’s lag in the artificial intelligence race, and the uncertainty about installing a program New CEO At John Ternos, the lack of a successful new product category is putting pressure on the company.

“There are a lot of things that investors can really get excited about, and if they’re going to sell the stock and pitch it to big institutional investors… in terms of it being one of the most valuable companies, they have to tell a really good story,” he said. This story is one of huge margins and profits even in the face of rising costs and AI-driven supply constraints.

The AI ​​boom is impacting almost every aspect of our lives, but this week, it’s been especially tough on our wallets with the announcement of… Another round of price hikes For Xbox, even Arduino has fallen into the trap Memory crisis. I’ve spent hours talking with marketing and business experts, exchanging emails and phone calls, and no one has been able to give me a satisfactory answer as to why building more data centers is a cost to consumers.