iPhone 18 components cost 38% more — Apple to sacrifice margin to keep prices stable

A global memory shortage has pushed the cost of iPhone 18 components up 38% year over year. The figures apply to models with 256 GB of storage, and TrendForce analysts warn the pressure could lead to higher device prices, although Apple is likely to offset some of the expense by accepting a lower gross margin.

An analysis of iPhone Pro models with 256 GB across the last two generations shows a sharp rise in memory's share of the total Bill of Materials (BOM). A year ago, memory accounted for roughly 10% of the BOM cost, but by the third quarter of 2026 that share had climbed to about 34%. In the first half of 2027, it could exceed 40%.

Despite this, analysts believe Apple will stick to the pricing strategy it adopted for recent MacBooks. The Cupertino company will probably sacrifice part of its gross margin to soften the price increase for iPhone 18 and maintain shipment volumes. Apple may also revisit pricing for older iPhone models, potentially raising their cost alongside the launch of the new generation.

TrendForce also notes that Android smartphone makers face an even sharper squeeze on margins. The pressure is especially acute in the entry-level and mid-range segments, where margins are already thin. With memory prices soaring since early 2025, many brands may halt production of products with negative gross margins in addition to imposing significant price hikes. As a result, global smartphone output is expected to keep declining through 2027.