* New MacBooks feature M5 chips, improved AI capabilities

* MacBook Air starts at $1,099 with 512GB storage

* MacBook Pro models offer 1TB storage as standard

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paragraphs 3,5-9)

March 3 (Reuters) - Apple ( AAPL ) on Tuesday unveiled

updated MacBook Air and MacBook Pro models, featuring its latest

M5-series chips and bigger base storage, in a bid to lure buyers

in a softening PC market squeezed by rising memory costs.

The update includes a new MacBook Air powered by Apple's ( AAPL )

latest M5 chip and higher-end MacBook Pro models equipped with

the new M5 Pro and M5 Max processors, which the company says

deliver significant gains in performance and on-device AI

capabilities.

The 13-inch MacBook Air starts at $1,099 and now comes with

512 gigabytes of storage as standard, double the base storage of

the previous generation. In the older lineup, customers had to

pay $1,199 to get a 512GB configuration, making the new starting

price effectively a price cut for the same storage tier.

Since transitioning from Intel processors to its in-house

M-series chips beginning in 2020, Apple ( AAPL ) has touted gains in

performance and battery life, helping it differentiate from

Windows-based PC makers.

The 14-inch MacBook Pro models powered by the M5 Pro chip

start at $2,199 and now come with 1 terabyte of storage as

standard, up from 512GB in many earlier base configurations.

With higher base storage on the MacBook Pro, Apple ( AAPL ) has

adopted a similar pricing strategy, bumping up standard

configurations while keeping headline prices largely unchanged.

The broader PC market has faced uneven demand in recent

years, with vendors competing aggressively on price as consumers

and businesses delay upgrades following the pandemic-era surge

in laptop purchases.

Memory chips such as DRAM and NAND flash are critical

components in laptops, affecting performance and storage

capacity, and their prices have sharply increased with limited

supply as chipmakers focus on manufacturing for AI applications.

On Monday, Apple ( AAPL ) launched the iPhone 17e, its more

affordable smartphone model starting at $599, and increased the

base storage to 256 gigabytes.

(Reporting by Akash Sriram in Bengaluru; Editing by Anil

D'Silva)