The cost of components for flagship smartphones continues to break records. Over the past twelve months, purchase prices for memory for the iPhone 18 Pro have nearly quadrupled, and this will directly hit consumers' wallets. Next week, Apple will unveil new prices, and in my estimation, they will be noticeably higher.
Analyzing the dynamics of the semiconductor market, I see unprecedented pressure on production costs. In just one year, the cost of memory modules for the Pro version with 256 GB of storage has quadrupled. This is not a temporary fluctuation, but a structural shift driven by a shortage of manufacturing capacity and high demand from the AI-device segment.
Apple's margin under threat
The Cupertino company is trying to offset rising costs by saving on other components, but these measures are clearly insufficient. The company now faces a tough dilemma: either sacrifice its legendary margin or pass the costs on to the end user. Judging by Apple's recent actions, which already raised prices on Mac, iPad, and Apple TV this summer, the choice is obvious—a retail price increase is inevitable.
"For the Pro model with 256 GB, in the third quarter of 2026, the cost of memory will be nearly four times higher than a year earlier. Retail price increases are becoming increasingly inevitable as long as production costs remain high,"—such is the current reality of the production cycle.
Forecast: a $100 price increase
According to my calculations, based on an analysis of the supply chain, the iPhone 18 Pro will cost roughly $100 more than its predecessor—the iPhone 17 Pro. This forecast looks more restrained than some extreme industry estimates, which cited figures of $250–300. However, a full pass-through of all costs to buyers will not occur.
Apple will likely bet on growing revenue from its services to soften the blow to its hardware business. Moreover, the company is well aware of consumer caution: a sharp price spike could trigger a drop in demand and slow down the device upgrade cycle. Many users would simply prefer to hold onto their older models for longer.
For investors, this trend is especially important amid recent volatility in AAPL shares and leadership reshuffles. The Apple Upgrade installment program, which allows paying in installments rather than shelling out the full amount at once, could ease the financial burden on buyers.
Exact figures and official prices will be revealed next week along with the announcement of the new iPhone lineup.
My take: the rise in memory prices is a systemic factor that will affect the entire electronics market, not just Apple's products. In the long term, we may see not only more expensive flagships, but also a shift in consumer habits, as the smartphone replacement cycle stretches from two to three or four years.