Computers, smartphones, memory chips, and other consumer electronic products, and the entire tech industry have been facing challenges due to tariffs, supply chain disruptions, and geopolitical tensions. However, there’s a bigger challenge that has been gaining momentum on the sidelines and that artificial intelligence (AI) boom. 

AI demand is starting to have a much greater impact on consumer electronics, as prices of smartphones, laptops, tablets, and other devices continue to rise significantly. On June 25, Apple increased the prices of its products, including MacBooks, iPads, and Apple TV, by up to Rs 1,00,000.

Must read: From MacBooks to Apple TV; Apple increases prices of its products by up to Rs 1 Lakh.

Apple said, “The consumer electronics industry is facing an unprecedented challenge. The rapid expansion of AI data centres has created an extraordinary surge in demand for memory and storage. We have never seen a component price increase this much, this quickly.”

On the other hand, Microsoft has also raised the prices of Xbox consoles by $150. Xbox said, “Console storage and memory prices have increased by more than 2.5 times, and we expect another doubling by the fall of 2027”

Apple Chief Executive Tim Cook told the Wall Street Journal that the price hikes are unlike anything he had seen “in any area in over 40 years.” SpaceX CEO Elon Musk also cited Cook and said it's the “Biggest price jump in anything I’ve ever seen.” 

Must read: Xbox price shock: Microsoft hikes consoles by up to $150 globally

The WSJ reported that the computer software and accessories prices have increased by 15%, highlighting the demand for AI and data centres. The report said the AI build-out has caused a “Third wave” of inflation, and AI companies are projected to spend about $8 trillion by 2032 on AI infrastructures. 

This has caused price hikes across the board, including memory and storage chips used in consumer electronics products. Products across brands such as Nintendo, Microsoft, and Sony have increased prices on devices, with higher price hikes reported for Apple products. Now, the price may continue to rise throughout the year, making consumer electronic products even more expensive for buyers.