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Apple to Absorb Memory Costs for iPhone 18 Launch
29 Jan
Summary
- Apple will maintain iPhone 18 prices despite rising memory costs.
- Company plans to offset increased expenses through services revenue.
- iPhone 18 models are expected to launch in the fall of 2026.
Apple is expected to maintain the pricing of its upcoming iPhone 18 models, despite significant increases in memory component costs. Analyst Ming-Chi Kuo indicated that Apple intends to absorb these rising expenses. This move is designed to retain market share, even if it impacts the company's gross margins in the short term.
The global demand for memory chips, largely driven by AI data centers, has led to supply reductions for smartphones and PCs, consequently driving up prices. While other manufacturers might pass these costs to consumers, Apple aims to avoid this by negotiating favorable terms with suppliers on a quarterly basis.
To compensate for the absorbed costs, Apple is anticipated to increase revenue through its robust services portfolio. Subscriptions such as Apple Music, Apple TV+, and iCloud+ may see price adjustments. This strategy allows Apple to offer competitive pricing on its new hardware while bolstering its recurring revenue streams.
The iPhone 18 lineup is slated for a fall 2026 unveiling, with reports suggesting three models: the iPhone 18 Pro, iPhone 18 Pro Max, and the first-ever foldable iPhone. If current pricing holds, the iPhone 18 Pro is expected to start at $1,099.
