A new TrendForce analysis estimates that Apple will pay 38% more for iPhone 18 Pro components than it did for its predecessor. Unsurprisingly, the biggest hike is in the cost of memory, with Apple said to be paying around three times more this year.
However, the firm’s analysis supports my own view that this year’s increase in price will not be as high as some have suggested …
iPhone 18 Pro components to cost 38% more
The cost of producing a new device can be broadly divided into three: components, assembly, and overhead. That latter category covers everything from research and development into the new device through to the cost of marketing campaigns.
The Trendforce report looks specifically at the first of these, otherwise known as the Bill of Materials (BOM).
TrendForce’s latest smartphone industry research reveals that escalating component costs—led by memory—are expected to significantly raise production expenses for Apple’s next iPhone 18 series. For the 256 GB model, the BOM cost is estimated to increase by about 38% YoY, making higher retail prices unavoidable.
It says that while memory comprised around 10% of the component cost of an iPhone last year, it’s expected to exceed 40% by next year.
That’s a dramatic shift. Just last year, the display was by far the most expensive component in an iPhone; this year, that will be the memory.
But Apple will likely absorb some of the cost
Two sources recently suggested that the starting price of this year’s iPhone 18 Pro will be $1,399. This latest estimate of Apple’s production costs could indeed support that kind of increase.
However, I argued last week that this is unlikely, with Apple probably choosing to absorb some of the increased cost in order to protect demand.
A $300 increase in the starting price of an iPhone Pro would be quite something. That’s a price jump Apple has so far reserved for far more expensive products, and I do think that this increase would deter a great many people from upgrading, especially as it looks like next year’s Pro model is going to be a significantly bigger deal. Apple loves its margins, but Tim Cook did hint during the earnings call that the company isn’t determined to protect them come-what-may.
TrendForce agrees, pointing to Apple’s MacBook price increases. As steep as these were, they didn’t reflect the full increase in Apple’s manufacturing costs.
TrendForce believes Apple is likely to follow the pricing strategy adopted for its recent MacBook launches by sacrificing part of its gross margin to soften price increases for the iPhone 18 lineup, helping preserve shipment volume.
The company also agrees with Bloomberg that Apple is likely to increase the price of the iPhone 17 Pro ahead of next month’s launch. This morning may prove to be your last opportunity to take Chance’s advice to buy this now.
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