- Apple aims to keep the iPhone 18 starting price unchanged despite rising RAM costs
- Memory suppliers are increasing prices due to global shortages and AI demand
- Apple plans to absorb higher costs and rely on services revenue to balance margins
- Other components beyond RAM may also face shortages in the coming year
Apple is preparing for a tricky balancing act as it looks ahead to the iPhone 18. On one side, global memory prices are climbing fast due to supply shortages and intense demand from the AI industry. On the other, Apple wants to avoid passing those higher costs on to customers.
According to respected supply chain analyst Ming Chi Kuo, Apple’s strategy is clear: protect the iPhone’s starting price, even if it means absorbing higher component costs internally.
This approach reflects Apple’s long standing sensitivity to price thresholds in key markets.
The company knows that even small increases can influence upgrade decisions, especially at a time when smartphone buyers are holding onto devices for longer. Keeping the entry price stable is as much about psychology as it is about economics.
How Apple plans to absorb rising RAM costs
At the center of the issue is RAM. Memory prices are rising globally as manufacturers struggle to keep up with demand, particularly from companies building data centers and AI accelerators.
Kuo notes that Apple has already changed how it negotiates with memory suppliers. Instead of locking in prices twice a year, Apple is now revisiting contracts every quarter.
That shift gives Apple more flexibility but also exposes it to more frequent price increases. Kuo expects another round of hikes in the next negotiation window. Rather than adjusting iPhone prices in response, Apple is reportedly willing to take the hit on hardware margins.
To offset this pressure, Apple is leaning harder on its services business. Revenue from subscriptions such as Apple Music, iCloud storage, Apple TV, and other digital services continues to grow steadily.
These services carry far higher margins than hardware, giving Apple room to maneuver when component costs spike. In effect, Apple is using its ecosystem to subsidize its devices.
The AI boom is straining more than just memory
While RAM shortages are grabbing headlines, memory is not the only concern. Kuo points out that several other components are becoming harder to source as suppliers prioritize customers tied to the booming AI sector. One notable example is glass cloth, a material used in printed circuit boards across smartphones, GPUs, and other advanced electronics.
Companies involved in AI hardware, including chipmakers and data center suppliers, are buying up large volumes of these materials. That competition leaves consumer electronics firms fighting for allocation. For Apple, this means potential bottlenecks that extend beyond memory chips and into the broader supply chain.
These pressures underline how deeply the AI surge is reshaping the electronics industry. Products that once had predictable supply cycles are now competing with hyperscale computing projects that operate on an entirely different scale.
Why holding the line on price still matters
Apple’s determination to keep iPhone 18 pricing steady speaks to its broader strategy. The iPhone remains the gateway to Apple’s ecosystem. A higher upfront cost could slow adoption, particularly in emerging markets or among younger buyers. By keeping prices flat, Apple protects unit sales while continuing to grow long term revenue through services and accessories.
That does not mean Apple will absorb costs forever. Over time, prolonged shortages or sustained increases could force changes, whether through configuration adjustments, storage tiers, or subtle shifts in regional pricing. For now, though, Apple appears willing to sacrifice some margin to preserve the perception of value.
For consumers, this strategy offers short term reassurance. Despite global shortages and industry wide cost pressures, Apple seems committed to keeping the iPhone 18 within familiar price boundaries. Behind the scenes, however, the company is navigating a far more complex and competitive supply chain than ever before.
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