Apple raised prices on its Mac and iPad lines worldwide on Thursday by as much as 20 percent, and Microsoft hours later lifted Xbox console prices by $100 to $150, the most direct evidence yet that the artificial-intelligence memory-chip shortage has reached the consumer-electronics shelf.

The two announcements, the largest single-day price actions by either company in years, moved the cost of a base MacBook Pro from $1,699 to $1,999 and pushed Apple's Mac Studio M3 Ultra desktop from $3,999 to $5,299, a $1,300 jump. Apple shares fell more than 6 percent, their steepest decline since President Trump's April 2025 "liberation day" tariff announcement.

Memory the culprit

Both companies pinned the increases on the surge in demand for the RAM and storage chips that fill AI data centers built by Nvidia, Advanced Micro Devices and Google. Apple said in a statement that it had "shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products, including today's increases for iPad and Mac." The company called the situation an "unprecedented challenge" and said, "We have never seen a component price increase this much, this quickly."

Microsoft said console storage and memory prices "have increased by more than 2.5x and we expect another doubling by the fall of 2027." The Redmond, Washington, company added that "the entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles."

The sticker shock

The base MacBook Air rose to $1,299 from $1,099, the iPad Air to $749 from $599 and the iPad Pro to $1,199 from $999, according to Al Jazeera. Apple's entry-level MacBook Neo, launched only months ago, moved to $699 from $599. The 512-gigabyte Xbox will sell for $499 starting in August and the one-terabyte version for $749, the BBC reported, leaving the console 30 percent to 40 percent more expensive than it was a year ago after an October hike of $20 to $70.

Apple's outgoing chief executive, Tim Cook, told The Wall Street Journal earlier in June that price increases were "unavoidable," calling the memory market "unsustainable." Cook said, "We definitely need memory pricing and supply to return to reasonable levels for consumer products. That's the bottom line."

Retailers brace

Gartner senior director analyst Ranjit Atwal told CNBC that soaring memory costs will cut global personal-computer shipments by 10.4 percent and smartphone shipments by 8.4 percent in 2026, and lift PC prices 17 percent and smartphone prices 13 percent against 2025 levels. Atwal said relief is unlikely "until the end of 2027."

Incoming Best Buy chief executive Jason Bonfig said on a call with reporters earlier this month that the chain's computing division will be hit hardest. "We did see some staggered price increases in Q1, so moving to Q2, we do expect [average sale prices] to increase and units from an elasticity perspective to be impacted," Bonfig said. The National Retail Federation and other groups asked the Treasury and Commerce departments earlier this month to examine the "urgent imbalance" in the memory market.

The pushback

Not every analyst expects pain to translate into lost customers. Dipanjan Chatterjee, vice president and principal analyst at Forrester, told the BBC that "if anyone can survive a price increase with minimal blowback, it's Apple." Loop Capital's Anthony Chukumba said larger retailers have "leverage" to delay pass-throughs, and that consumers replacing four- or five-year-old laptops "are none the wiser" about the underlying chip math.

Watch the iPhone

The next test arrives this fall, when Apple is expected to announce the 2026 iPhone. Trevor Long, an Australia-based consumer-tech analyst, told Al Jazeera he expects "a $50-150 price rise across the range, depending on models." Microsoft, having tied its next move to chip costs that it forecasts will double again by late 2027, has effectively warned that Thursday's Xbox increase will not be its last.