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Tech firms are blaming AI for mega device and console price rises

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Why This Matters

The rising costs of essential components driven by AI's demand are leading major tech companies like Apple and Microsoft to increase prices on their devices and consoles, marking a shift from the traditional trend of decreasing electronics prices. This trend could impact consumer affordability and reshape the market dynamics in the tech industry, highlighting the broader influence of AI infrastructure costs on consumer electronics.

Key Takeaways

For years, buyers of tech could rely on a familiar trend - that older devices would get cheaper over time.

That now seems to have stopped, or in some cases, completely reversed.

Apple and Microsoft's Xbox have joined the firms hiking prices for devices and games consoles which are years old.

They and other tech companies have pointed to the rising cost of crucial components needed to build their machines, laying the blame on AI.

Compute-hungry data centres, which power AI, need more and more chips to keep up with demand from AI companies - which means the demand for them is far outstripping supply.

Some people have called it "Ramageddon" - as random access memory (Ram), a once-cheap part of any computer, has now shot up in price.

But big tech's Ram woes are failing to gain the sympathy of many consumers facing eye-watering costs for barely-new electronics.

Apple has raised the prices of its tablets and laptops by nearly 20%.

The news was swiftly followed by Microsoft saying it would yet again raise the price of its five-year-old Xbox Series S and X consoles by at least $100 (£75.70).

The pricing changes, which will take effect from August, are its third in just over a year - and see the cost of a new console be 30% to 40% more expensive than it was this time last year.

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