Apple Plans to Keep iPhone 18 Prices Steady Despite Rising Component Costs [Kuo]

Apple is facing a significant increase in component costs, particularly for memory, but the company reportedly plans to absorb those expenses rather than pass them on to consumers with the iPhone 18. TF International Securities analyst Ming-Chi Kuo says Apple intends to maintain current starting prices for its next-generation handsets later this year.



Kuo says LPDDR memory prices rose in the first quarter of 2026 largely in line with expectations, while NAND flash increases have been more modest. Even so, Apple has already adjusted how it negotiates memory pricing, moving from six-month agreements to quarterly discussions. That change suggests the company is preparing for another round of increases in the second quarter. The pressure reflects broader industry trends, including warnings that flash memory prices were set to jump as AI server demand continues to strain supply.


According to Kuo, Apple's scale gives it an advantage over many non-AI hardware brands, some of which are struggling to secure components even when budgets allow. Apple can still lock in supply, but at higher cost. Those increases are expected to weigh on iPhone gross margins, a tradeoff Apple appears willing to accept to protect market share, with its high-margin Services business positioned to offset the impact over time.

Memory is not the only area under pressure. Apple has reportedly recognized that the AI server boom is tightening availability across other parts of the supply chain, including critical materials like T-glass. Investors are expected to watch closely for additional details on these cost pressures during Apple's earnings call this week.

Despite a rising bill of materials—which also includes a significantly more expensive 2nm A20 processor—Apple's current plan for the second half of 2026 is to keep iPhone 18 pricing unchanged to preserve its competitive positioning.

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