iPhone 18 Pro Prices May Not Rise: How Apple Plans to Absorb Component Cost Surge

Apple could face a sharp increase in the cost of making the iPhone 18 Pro, but that does not necessarily mean consumers will absorb the full increase.

TrendForce estimates that the bill of materials (BOM) for the 256GB iPhone 18 Pro could rise by about 38% year on year, with memory costs driving much of the increase. The research firm expects Apple to offset part of the pressure by accepting lower gross margins, potentially limiting the impact on the device's retail price.

That could be significant for consumers following the iPhone 18 Pro price ahead of its expected launch. Recent reports have suggested a substantially higher starting price, but the latest cost analysis does not establish what Apple will ultimately charge.

Memory Is Driving Apple's Higher Production Costs

The biggest change to Apple's cost structure is coming from memory. TrendForce says memory accounted for around 10% of the component cost of an iPhone last year. Its share is expected to rise sharply as memory prices increase, potentially exceeding 40% by next year.

That would make memory a much more important expense for smartphone manufacturers than it has been in previous generations.

The shift is significant because Apple's bill of materials covers the physical components used to build the device. A higher BOM does not automatically translate into an equivalent increase in the retail price, as Apple's pricing also reflects operating costs, margins, demand, and its broader product strategy.

Apple Could Protect Demand by Accepting Lower Margins

TrendForce expects Apple to absorb some of the additional expense rather than passing the entire increase on to customers.

The research firm points to Apple's recent MacBook pricing strategy as an example. Although manufacturing costs increased, Apple did not fully reflect those increases in retail prices. TrendForce believes the company could adopt a similar approach with the iPhone 18 range to help preserve shipment volumes.

That would create a trade-off between profitability per device and the number of devices Apple sells. A substantial price increase could encourage some customers to delay upgrading, particularly as smartphone replacement cycles have lengthened.

For Apple, accepting some pressure on margins could therefore be a way to keep its flagship range within reach of existing customers while protecting sales volumes.

What the $1,399 iPhone 18 Pro Rumour Really Means

Recent reports have suggested that the iPhone 18 Pro could start at $1,399, which would represent a significant increase over the previous generation.

The higher production-cost estimate makes a price rise more plausible, but it does not confirm the rumoured figure. A higher BOM demonstrates that Apple is facing greater manufacturing pressure, not that the company will transfer that entire cost to buyers.

The $1,399 figure therefore remains unconfirmed until Apple announces the device and its official pricing. For shoppers, the distinction matters. Production costs can influence Apple's pricing decision, but the final figure will also depend on how much margin the company is willing to retain and how strongly it wants to encourage upgrades.

The Cost Pressure Could Spread Across the Smartphone Market

Apple is not the only company dealing with higher memory costs. TrendForce expects rising memory expenses to put pressure on smartphone manufacturers more broadly. Companies operating with thinner margins may have less flexibility to absorb higher component prices, potentially increasing pressure on retail prices across the industry.

That could make Apple's decision particularly significant. If the world's most valuable smartphone company accepts a smaller margin to limit price increases, competitors will face their own decisions over whether to raise prices, reduce profitability, or adjust specifications.

For manufacturers with less financial flexibility, absorbing a comparable increase may be considerably harder.

The 38% increase in estimated component costs also needs to be put into context. It refers to the bill of materials, not the final retail price of the iPhone 18 Pro. The retail price covers far more than the individual components, meaning a 38% increase in the BOM does not imply a 38% increase for consumers.

Until Apple confirms its pricing, the key issue for buyers is therefore the size of the increase it ultimately chooses to pass on. The latest analysis suggests the company has another option: using its margins to cushion customers from some of the pressure created by rising component costs.