Apple increases AppleCare+ rates as the memory shortage expands from hardware to services.

      Apple has increased the monthly price of AppleCare+ subscriptions for Macs and iPads by 50 cents, as reported by Bloomberg on Tuesday. This adjustment follows a trend of price hikes affecting the company's hardware products. The annual plans have also seen a rise of five dollars. The new rates apply only to new subscribers, allowing existing customers to maintain their current pricing.

      With the updated pricing, a monthly AppleCare+ subscription for a 13-inch MacBook Air has gone from around $7.50 to about $8. The annual plan has increased from approximately $75 to $80. While the hike is small on its own, it is part of a broader trend that began after Tim Cook highlighted in June that price increases were “unavoidable” due to the global shortage of memory chips.

      Last month, Apple raised prices for a range of products including iPads, Macs, Vision Pro headsets, HomePod speakers, and Apple TV devices, with some increasing by several hundreds of dollars. The $599 Mac Mini was completely discontinued earlier this year due to unsustainable DRAM costs. Apple is also anticipated to increase iPhone prices when it launches new models in September, potentially affecting its largest revenue stream.

      AppleCare+ provides customer support, accidental damage repairs, and battery replacements for Apple devices. The company introduced AppleCare One last year, a separate service priced at around $20 per month for coverage of up to three devices under one plan. The recent AppleCare+ price increase does not seem to impact AppleCare One pricing.

      The underlying issue driving these changes is the same factor contributing to hardware price increases in the tech industry. The construction of AI data centers has taken a significant portion of global memory production, leading to a sharp rise in DRAM prices and reducing supply for consumer electronics. According to Counterpoint Research, memory prices have increased nearly fourfold over the last three quarters, as companies like Samsung, SK Hynix, and Micron have shifted their capacities towards high-bandwidth memory needed for AI servers.

      Although a 50-cent increase in a service plan is unlikely to drastically change purchasing decisions, it reflects that Apple's cost pressures are now affecting more than just hardware. When a company that has grown its services division into a $100 billion annual revenue stream starts passing on component cost increases to warranty subscriptions, it indicates that the memory shortage is impacting all levels of the business.