iPhone 18 Pro series: Apple could raise prices, but would it hurt demand?

Apple could face nearly $300 higher BoM costs on the top iPhone 18 Pro Max, but tiered pricing, financing, services and its premium positioning could let it limit the price increase on entry-level

Apple is expected to launch the iPhone 18 Pro and iPhone 18 Pro Max in September, along with its first foldable iPhone. However, the launch will come in the middle of what Tim Cook previously described as a “hundred-year flood” when speaking to the Wall Street Journal about the current memory crisis.

 

Memory and storage prices have risen sharply over the past year, and with Apple likely powering the anticipated iPhones with a new 2nm-based A-series chip, there could be additional pressure on the company from a rising bill of materials (BoM).

 

In June, Cook in an interview with WSJ said the “price increases are unavoidable”, and Apple has since acted on that warning. The company raised prices on several Macs, iPads and other products, with some models seeing significant increases in India. The iPhone, however, was left untouched.

 

 

That decision is visible in Apple's market performance as well.

 

According to Counterpoint Research, global smartphone shipments fell 11 per cent year-on-year in the second quarter of calendar year 2026 (Q2 CY2026), marking the weakest second quarter since 2013. Apple's shipments, however, increased 3 per cent YoY, lifting its share to 20 per cent, the company's highest share for a second quarter.

Compare that with another category where Apple did raise prices.

 

Worldwide tablet shipments fell 9.9 per cent YoY in Q2 CY2026, according to Omdia, and Apple's iPad shipments declined too by about 7.5 per cent.

 

However, the iPhone may not remain insulated from the price pressure for much longer.

iPhone 18 series to launch at a higher price?

According to Counterpoint's Monthly Memory & Storage Pricing Tracker, DRAM average selling prices have increased 400 per cent and NAND prices by more than 300 per cent over the past 12 months. The research firm says the increase has outpaced Apple's ability to engineer around higher component costs.

 

The problem is also unlikely to disappear quickly. Counterpoint expects the component-cost cycle to remain difficult for at least another 18 months, with datacentres receiving allocation priority, followed by automotive, PCs and smartphones.

Apple is also expected to move the A-series chip in the iPhone 18 generation to TSMC's 2nm process. Counterpoint describes the node as one of TSMC's most expensive and says wafer prices across leading-edge processes have already increased.

 

The result is a cost increase across two components that Apple has limited ability to substitute or remove.

 

The market research firm estimates that the BoM for the highest-specification iPhone 18 Pro Max with 12GB RAM and 1TB storage could rise by nearly $300 over its predecessor. The 256GB and 512GB variants across the base and Pro models could see costs rise by $200-250.

But there is a catch

Instead, the company could distribute the increase across storage tiers, services, financing and its supply chain. That would allow Apple to protect margins while keeping the entry price relatively contained.

 

The research firm expects a tiered pricing strategy, with a relatively smaller increase on base configurations and a larger increase on higher-capacity models. The reason is that Apple could use more cost-effective NAND solutions in the 512GB and 1TB variants.

 

That gives Apple room to widen the price gap between configurations.

 

A larger increase on a 1TB iPhone is less likely to affect demand than the same increase on the entry configuration. Counterpoint says the lesser capacity tiers have traditionally faced greater percentage pressure than the 512GB and 1TB versions. With iPhone 18, Apple could therefore recover more margin at the top of the range while keeping lower configurations closer to existing prices.

Apple already has room at the premium end

Apple's position in the premium smartphone market gives it more flexibility than most rivals.

 

Counterpoint estimates that smartphones priced at US$600 and above accounted for a record 29 per cent of global smartphone shipments in the first half of 2026, up from 25 per cent a year earlier. Apple and Samsung together accounted for 84 per cent of the premium segment.

 

Apple's position is also strengthening in India, where the company has been gaining share despite selling phones at considerably higher prices than the market average.

 

In 2025, Apple accounted for 9 per cent of India's smartphone shipments and 28 per cent of the market by value, both records for the company.

 

More importantly, the iPhone 17 became India's highest-selling smartphone by volume in Q1 CY2026, with more than 4 per cent market share despite starting at Rs 82,900.

 

That suggests there is still considerable demand for Apple's phones even when they sit well above the average smartphone price.

Financing can hide part of the price increase

There is another reason the sticker price may not tell the whole story.

 

Counterpoint expects financing to account for 42 per cent of smartphone sales in India in 2026, up from 35 per cent in 2025. Rising device prices, no-cost EMI schemes and consumer preference for monthly payments are driving the shift.

 

Apple is already among the leading brands in India's financed smartphone market, although Samsung currently leads the category. Counterpoint data reported in July showed Samsung followed by Vivo and Apple among the leading brands for smartphone sales through financing.

 

This matters because financing changes how a price increase is perceived.

 

Counterpoint estimates that a $200 increase spread across a 36- to 40-month ownership period works out to roughly $5 a month.

 

For Apple, trade-ins, EMI schemes and financing can therefore reduce the immediate impact of a higher sticker price without removing the increase itself.

Services could absorb part of the hardware cost

Apple has another option that most smartphone makers do not have at the same scale: services.

 

Counterpoint puts Apple's services business at roughly $120 billion and argues that Apple Intelligence could eventually become another source of recurring revenue. Its analysis models a potential $10 monthly price for an on-device-heavy AI service and estimates a possible $10-20 billion first-year uplift to the services business. This is a Counterpoint scenario, not an announced Apple pricing plan.

 

The timing matters. Apple would not necessarily need to recover the entire increase in hardware cost when an iPhone is sold. Revenue from subscriptions and services can accrue throughout the three- to four-year life of a device.

 

That gives Apple some room to absorb hardware margin pressure in the short term.

Supply chain cannot solve the whole problem

Apple can also negotiate with suppliers, sign longer-term agreements and reduce costs in areas such as displays, cameras, casings, materials and packaging. Counterpoint, however, says Apple's bargaining position has weakened, particularly in silicon procurement, as demand from datacentres and other industries has increased.

 

Memory is even harder to control.

 

Counterpoint identifies China's CXMT as a potential supplier and bargaining option, but says its constrained capacity, likely prioritisation of Chinese customers and regulatory hurdles limit how much leverage Apple could gain.