Even though DRAM shortages and associated price increases are set to impact smartphone manufacturers like Apple this year, the company will look to keep its iPhone 18 prices steady despite having a higher per-unit manufacturing costs.
Per noted analyst Ming-Chi Kuo, Apple negotiates memory prices with suppliers on a quarterly basis, so price increases are expected in the second quarter of 2026. The upcoming price hike will be similar to the first quarter increase, which has already seen Apple paying more for memory. It’s estimated that DRAM prices are increased by 10 to 25 percent compared to last year.
While the higher memory costs will impact Apple’s gross margins, Kuo stated that Apple is in a position to establish deals to get a steady supply of components. As such, it can absorb some of the increased cost.
Per Kuo:
The higher memory cost will impact the iPhone’s gross margins, but Apple is in a position to establish deals to get a steady supply, and it is able to absorb some of the increased cost. From Kuo:
“For most non-AI brands, even if you’re willing to pay up, there’s no guarantee you’ll get the supply. The fact that Apple can lock in a deal like this shows just how much leverage it has.
Higher memory costs will hit iPhone gross margins. But Apple’s playbook is clear: use the market chaos to their advantage–secure the chips, absorb the costs, and grab more market share. They’ll make it back later on the services side.”
Apple may need to address the memory price increase during its January 30 earnings call, which will cover the first fiscal quarter of 2026. Kuo has stated that he expects Apple to avoid raising prices “as much as possible,” and that at least the starting price of the iPhone 18 models will be flat.
Apple previously absorbed component costs increases and was able to keep iPhone 17 pricing around the same level this past fall. The base iPhone 17 model stayed at a $799 price point, although Apple did start charging $100 more for the iPhone 17 Pro because of the new 256GB minimum storage.
The current memory shortages within the supply chain, especially with LPDDR and NAND components, have been caused by shortages and higher prices because of demand from the AI industry. Chip manufacturers are prioritizing advanced memory for AI servers over the memory used in smartphones, and there has been speculation that the memory price increase will cause smartphone costs to rise across multiple brands.
Stay tuned for additional details as they become available.
Via MacRumors and @mingchikuo
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