The cost of memory for the future iPhone 18 Pro has nearly quadrupled in a year. This is an unprecedented surge that puts Apple before a difficult choice: cut margins or pass costs on to consumers. In my estimates, the retail price of the flagship could rise by about $100, and that's just the tip of the iceberg.
Supply chain analysis shows that the dramatic rise in memory component prices is not a temporary phenomenon but a structural shift. For the Pro version with 256 GB of built-in storage, the cost of purchased chips is now nearly four times higher than a year ago. Even aggressive cost optimization on other components cannot offset this blow to the cost base.
Apple's margin under pressure: there's almost no choice
The Cupertino-based company now faces a dilemma: either sacrifice profitability, which is highly unlikely for a publicly traded company, or raise prices on its devices. Notably, Apple has already revised the prices of Macs, iPads, and Apple TV this summer, citing exactly this rise in production costs. Smartphones remained the last bastion, but it seems that too will have to be surrendered.
Forecasts on the scale of the price increase vary. Earlier estimates ranged from $250 to $300, but a more realistic scenario is a price increase of about $100. This is a more cautious step, given consumers' high price sensitivity in the current macroeconomic environment. Fully passing on the fourfold cost increase to buyers would be suicide for demand.
Services and installment plans as shock absorbers
Instead of sharply raising hardware prices, I expect Apple to bet on growing revenue from services and financial tools. The already announced Apple Upgrade installment program will help soften the blow to wallets by spreading payments over time. This is a classic tactic: maintain audience loyalty without scaring it off with a high one-time price.
We'll know the final figures next week with the presentation of the new lineup. However, for investors, this trend is extremely important: it signals a possible slowdown in device upgrade cycles, as users will hold onto their current gadgets longer. Against the backdrop of recent volatility in AAPL shares, this adds another layer of uncertainty.
My view: The rise in memory prices is not just an Apple problem but a marker for the entire industry. We are witnessing the end of the era of cheap components, which will inevitably impact the cost of all tech products. For crypto investors, this is an indirect signal: inflationary pressure in the "real" sector persists, which could sustain interest in safe-haven assets, including bitcoin.