Apple's iPhone 18 Pro Part Costs Explode 38% On Soaring Memory Prices
Apple is experiencing a record rise in the costs of the components that go into its next-generation flagship hardware. TrendForce, a market research firm, has stated that the cost of the components for the 256GB model of the iPhone 18 Pro will increase by about 38% as compared to that of last year's iPhone 17 Pro, thereby resulting in "unavoidable" retail price increases.
One reason for the price jump is the adoption of TSMC's cutting-edge 2-nanometer node for Apple's custom A20 Pro chip. However, that is not the primary driving force. The main culprit behind the sharp spike is much higher memory pricing compared to previous-generation iPhone launches.
"Driven by soaring memory prices, TrendForce estimates that the BOM cost of the 256 GB iPhone 18 Pro, scheduled for release in the third quarter of 2026, will be approximately 38% higher than that of its 2025 predecessor. If memory prices continue their upward trajectory, the BOM cost of the iPhone 18 Pro 256 GB is expected to increase even further in 2027," TrendForce says.
The research firm is already anticipating another spike next year, saying Apple's total BOM cost will likely exceed 40% in the first half of 2027.
This marks a notable shift from before the current memory crisis. In past years, the OLED display panel and custom silicon have accounted for the lion's share of an iPhone's bill of materials. However, the ongoing global memory shortage has flipped the script.
Will Apple Pass the Bill to Consumers?
The question now becomes whether or not Apple will raise prices on its next-generation iPhone models. According to TrendForce, Apple will most likely sacrifice part of its gross margin to soften price increases for the iPhone 18 lineup, similar to Apple's strategy for its recent MacBook launches.
Even if correct, it doesn't necessarily mean that launch prices will be identical next round. After all, Apple already issued sweeping price increases to its hardware, including the budget-focused MacBook Neo that spiked somewhat of price war (or bang-for-buck war) with Windows PCs in the $599 segment. So the notion that the iPhone 18 will not see higher prices is not a given.
It's not just Apple that faces this dilemma; so does the field of Android device makers.
"If even Apple—with its industry-leading profitability—is facing such pressure, Android smartphone vendors are likely to experience an even greater margin squeeze. Android brands will need to pass through a larger portion of rising component costs to remain profitable and avoid selling devices at a loss, resulting in steeper retail price increases than those expected for the iPhone," TrendForce says.
What's unfortunate is that the pressure to raise prices will especially affect entry-level and mid-range models, as those segments are already dealing with thin margins. According to TrendForce, Apple and other brands may have no choice but to implement substantial price increases, or even discontinue certain product lines.
