Apple’s upcoming iPhone 18 Pro is projected to cost nearly 40% more to manufacture than its predecessor, primarily due to escalating memory prices. This significant increase in production costs is likely to result in higher retail prices for consumers.
According to recent analyses, the bill of materials for the 256GB iPhone 18 Pro is estimated to be approximately 38% higher than that of the equivalent iPhone 17 Pro. A major factor contributing to this surge is the rising cost of memory components. Previously, memory accounted for about 10% of the total component cost for a 256GB iPhone Pro model. However, current estimates suggest that this figure has risen to around 34% in the third quarter of 2026 and is expected to surpass 40% in the first half of 2027. Consequently, expenses for other components, such as display panels and application processors, have become less significant in comparison.
In response to these mounting costs, Apple is anticipated to adopt a strategy similar to its recent MacBook launches. This approach involves absorbing a portion of the increased expenses to keep price hikes manageable for consumers, thereby maintaining sales volumes. Additionally, Apple may consider raising prices on older iPhone models concurrently with the release of the new lineup to distribute the cost recovery more evenly across its product range.
The surge in memory prices, which have increased five- to sevenfold since early 2025, is not unique to Apple. Android manufacturers, particularly those in the entry-level and mid-range segments, are also expected to implement steeper price increases or potentially discontinue certain product lines to cope with these rising costs.
In June, Apple raised prices across several product lines, including Macs, iPads, Apple TV, HomePod, and Vision Pro, citing similar concerns over memory shortages. While the iPhone lineup was spared during that round of price adjustments, it appears increasingly likely that the upcoming iPhone 18 Pro will not be exempt from future increases.
Apple is expected to announce the iPhone 18 Pro, iPhone 18 Pro Max, and its first foldable iPhone “Ultra” next month. As the company navigates these cost challenges, consumers should prepare for potential price adjustments across the iPhone lineup.
Given the substantial rise in production costs, particularly due to memory price inflation, Apple’s strategy to balance absorbing costs and adjusting retail prices will be crucial. Consumers should stay informed about these developments, as they may influence purchasing decisions and the overall value proposition of the new iPhone models.
