Perhaps the most visible impact of the AI industry right now is that consumer electronics are getting more expensive. Price hikes are happening left and right and, while smartphones have been mostly spared so far, that no longer feels sustainable, and you can blame AI for it.
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Watching tech prices this year has been a game of when, not if. Virtually every major product has seen some form of price hike, and this week saw two big brands fall to the pressure of rising costs.
Microsoft issued yet another Xbox price hike, but the bigger domino was Apple, which announced sweeping price hikes across basically everything in its lineup except for iPhone, AirPods, and Apple Watch – give it time. As 9to5Mac detailed, these aren’t small price hikes either, with Apple tacking hundreds on dollars on top of existing prices for many products includings its MacBook lineup.
It’s a significant tipping point, as Apple was one of the biggest holdouts as far as price hikes were concerned. Motorola, Samsung, Lenovo, Sony, and countless other big tech brands announced their first waves of price hikes months ago, but Apple was holding out.
Google is the only notable holdout left, but it now feels inevitable, almost imminent, that Pixel will be affected in one way or another.
And it’s all of these big tech brands that are ultimately to blame.
Engadget put it best, I think. “We’re all trying to find the guy who did this.”
Microsoft announced its Xbox price hike, but didn’t acknowledge that the company itself, alongside every other major AI player, is mostly to blame. The steep rise in demand for memory and storage that’s come with the boom of AI products and services is directly responsible for why your favorite tech is getting more expensive.
Read Engadget’s post here
Another take that’s been going around in all of this – can these companies survive this backlash? Data centers and their impact on local water and electricity have already generated a lot of backlash from the public. Raise the price of a new console? Their new phone? That’s how you make it really personal.
Microsoft itself acknowledges that this problem isn’t going away – it’s just going to get much worse over the next year or two.
We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options. Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027. The entire consumer electronics industry is struggling with the current components crisis…
It just doesn’t seem sustainable, certainly not for the products being released in the next few months. Galaxy Z Fold 8, Pixel 11, iPhone 18, so on, they’re all very likely to get a lot more expensive, and not because of any drastic upgrades.
It’s a vicious cycle, too. Google, for instance, is building everything around AI, including its hardware, and yet the impacts of the memory shortage are inevitably going to have an impact on the Pixel 11’s price tag. Everyone’s desire to build AI products requires AI to get better, which requires more resources, which ends up putting those very products out of reach by drastically raising the prices.
And yet, the AI train keeps on chugging along.
When will the tracks blow up?
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