Global tech giant Apple Inc. has experienced a significant drop in its stock, falling by six per cent and marking the firm’s worst single-day performance in more than a year after the company announced price hikes for Macs and iPads.
The latest development comes shortly after Apple increased prices by $200 on several Mac laptops and iPads due to the rising global cost of memory and storage chips, which has been linked to high demand from artificial intelligence (AI) data centres.
Following the price increase, Apple’s stock fell by nearly six per cent, with the company losing more than $200 billion in market value.
The price increase affects five Apple products: the MacBook Neo, MacBook Air 512GB, MacBook Pro 1TB, iPad Air 128GB, and iPad Pro WiFi 256GB. Prices have risen by an average of 19 per cent across the devices.
Despite the price hike, other Apple products, including the iPhone, Apple Watch and AirPods, were not affected.
Apple is currently working to find solutions to reduce the impact on customers while continuing to provide premium products with advanced features.
Apple CEO Tim Cook told The Wall Street Journal in an interview last week that the price hike had become unavoidable for the company, with the increase being linked to demand driven by artificial intelligence (AI).
Mr Cook said, “Unfortunately, price increases are unavoidable. We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.”
Apple is working to stabilise the situation and find ways to shield its customers while continuing to provide premium-quality products. However, the situation remains difficult due to the growing demand for AI-related technology.
Apple is not the only company affected by the rising cost of memory and storage chips. Microsoft also announced price increases for its Xbox division, with some models rising by $100 and others by $150.
The increase in chip prices has been driven by demand for high-bandwidth memory used in AI servers, with the shortage benefiting chip manufacturers such as Micron Technology, which recorded a 1,400 per cent increase in its quarterly profits.
Apple’s valuation is expected to benefit from the anticipated launch of the company’s first foldable iPhone as the firm continues to focus on providing premium devices with advanced hardware features.