Apple’s upcoming flagship smartphone iPhone 18 Pro is set to see significantly increased component costs months ahead of its launch, with memory chips being the largest contributor to the rise, according to new research. The findings suggest that the final selling price of the iPhone 18 Pro could increase from the previous year’s iPhone 17 Pro, and potentially impact the affordability of the most popular smartphone models in the global market.
Apple is due to announce the new iPhone 18 lineup at its traditional September event, and the company is currently considering its pricing options within the context of soaring global chipset prices, which are impacting the entire industry. This year’s update to Apple’s flagship smartphone is proving to be an especially challenging test for the world’s most valuable smartphone maker, as it tries to balance the increased costs with its overall strategy for the iPhone product line.
iPhone 18 Pro Production Costs To Surge By Almost 40%
Research firm TrendForce has estimated that the bill of materials (BOM) for the 256GB variant of the iPhone 18 Pro is set to increase by 38% year-over-year. According to the forecast, the 3rd quarter of 2026 will witness one of the largest-ever annual price hikes for Apple’s flagship smartphone.
While prior year-over-year increases in production costs were largely driven by upgraded camera modules, application processors, and displays, the current situation is different in that rising memory prices have become the largest contributing factor. Dram modules are set to comprise over 40% of the iPhone’s bill of materials, compared to only around 10% of the cost a year earlier. This would mark the first time that memory modules comprise the largest single portion of the bill of materials for any iPhone variant.
TrendForce’s analysis highlights that the issue is not due to Apple’s choice to equip the new iPhones with significantly more RAM or storage. Rather, the situation reflects the memory market conditions, where supply constraints for mobile DRAM have resulted in dramatically increased prices. The same conditions apply to PC memory, and smartphone makers are now locked in a brutal competition with cloud server manufacturers for available memory chip supplies.
Why Have Memory Prices Gone Up So Much?
The current memory price increase has been triggered by the demand from AI server manufacturers, which has caused leading memory makers Samsung Electronics, SK Hynix, and Micron to reallocate resources toward higher-margin HBM and server DRAM products. Smartphone and PC memory producers have seen their prices drop by as much as 5-7x since early 2025, depending on the exact type of DRAM.
From a supply-demand standpoint, however, the situation is fully rational: server-memory makers are commanding much higher prices from chip foundries, which has resulted in the smartphone market being unable to secure supplies at reasonable prices. TrendForce has observed that Apple CEO Tim Cook has referred to the situation as a “hundred-year flood,” with the cost spike affecting the entire electronics industry. Thus, there is strong reason to believe that the memory price increase has become a long-term structural change that will impact the smartphone market for years to come.
Apple’s use of TSMC’s cutting-edge 2-nanometer process for its A20 Pro “Falcon” chipset is also expected to add to the production costs, albeit to a much lesser extent than the memory situation. New chipset architectures typically carry a higher price tag at launch, due to the yields being lowest on the most advanced process nodes. TrendForce’s analysis, however, suggests that the increased cost of cutting-edge silicon is only a small part of a much larger memory-driven increase.
Will The iPhone 18 Pro Be More Expensive Than The iPhone 17 Pro?
The final selling price of the iPhone 18 Pro is now the main topic of discussion among analysts and buyers. TrendForce has hypothesized that Apple would be willing to accept reduced profit margins, similar to its recent strategy for the Mac computers, in order to ensure sustained demand for the iPhone 18 Pro. In other words, Apple would be willing to sacrifice profitability in favor of volume.
While some observers expect Apple to increase the prices of the entry-level and mid-range iPhone 18 models, as a method of offsetting the higher costs, the higher-end Pro and Pro Max variants would seemingly hold their price ranges. According to some reports, the iPhone 18 Pro Max 128GB variant could start at $1,399, while Apple might also increase the prices of its lower-end iPhone 18 models in order to reduce the gap between the Pro and entry-level devices.
It should also be noted, however, that several prominent analysts, including Ming-Chi Kuo and Jeff Pu, have suggested that Apple could keep the prices of the iPhone 18 Pro and Pro Max identical to the standard iPhone 17 Pro models. TrendForce, on the other hand, has estimated that prices for the iPhone 18 Pro 256GB model could start at $$1,099 for the 256GB model, with the Pro Max starting at $1,199, which would be identical to the existing iPhone 17 Pro pricing. This would seemingly allow Apple to avoid any price increase in the flagship iPhone 18 Pro, while also addressing the rising costs by cutting profit margins on other iPhone models.
The disagreement between various supply-side analysts stems from the fact that the entire situation ultimately depends on Apple’s intentions. TrendForce’s analysis has assumed that Apple will inevitably have to alter its pricing strategy, due to the significantly increased costs. By contrast, Kuo and Pu have argued that Apple has a vested interest in keeping the headline prices identical to those of the preceding generation, as a means of maintaining flagships’ appeal and overall market share.
With Apple’s actual intentions remaining unclear, the situation could change considerably depending on the release timing of the iPhone 18 Pro. Both sides of the argument, however, appear reasonable, assuming that Apple would want to avoid losing customers to rival smartphone makers. The final outcome of the situation also depends on the actual increase in component costs and the extent to which they affect the final selling price.
iPhone Prices And The Larger Smartphone Market Outlook
Apple’s ability to absorb some of the increased costs is likely to put the company in a much stronger position than many of its rivals, particularly among the Android smartphone manufacturers. In general, the Android ecosystem comprises dozens of different manufacturers, most of whom operate with much tighter margins than Apple. Thus, the increased memory costs are certain to lead to higher selling prices across multiple flagship Android models, in the months and years ahead.
The dynamics of the supply-demand relationship could also affect the competitive dynamics of the smartphone market, for the years to come. If Android flagship makers are forced to increase their prices at a faster rate than Apple, the latter will find itself in a stronger position than before. Even as the iPhone 18 Pro price increase potentially impacts its entry-level models, Apple is likely to retain much of its appeal among mainstream buyers. The same situation applies to the long tail of Android manufacturers, although the smaller players with the tightest margins are likely to struggle considerably.
The overall memory shortage will also affect the laptop and PC markets, as many manufacturers have seen HBM and server DRAM prices increase at an unsustainable rate. TrendForce has already observed that Apple’s recent decision to only partially pass on the increased notebook PC component costs to the consumers, by adjusting the Mac prices at a slower rate than the component price increases, will affect the iPhone 18 Pro dynamics as well. Apple is expected to utilize a similar strategy for the flagship iPhone 18 Pro, by adjusting the prices in a way that allows the company to maintain its profitability and competitive positioning.
At this point, the figures published by TrendForce only represent analyst estimates, based on the current supply-demand conditions. Apple has not announced any details about the pricing strategy for the iPhone 18 Pro, and the company will ultimately decide whether to absorb some of the higher costs, or pass them on to the consumers in full. For now, buyers will have to wait for Apple’s official announcement, which is expected to take place at the company’s 2026 Product Launch Event in September, wherein the pricing, technical specifications, and final release date of the iPhone 18 series will be announced.
