GF Securities analyst Jeff Pu has downgraded Apple to “Hold” following the company’s quarterly guidance. Citing rising costs for TSMC’s silicon wafers and inflationary pressures on NAND and DRAM memory, Pu expects the iPhone 18 Pro and iPhone 18 Pro Max to cost $200 to $300 more when the new smartphones launch in September.
Premium Smartphone Prices: Component Costs Driving iPhone 18 Pro Price Hikes
Rising memory chip costs and demand for AI server infrastructure are driving widespread price increases across the global smartphone market.
The twin forces of trade restrictions in the Gulf and the rapacious demands for AI server infrastructure have driven up the prices of memory and storage. While some costs can be absorbed by reducing margins, manufactuers have been working to amortise higher costs through higher retail pricing, increasing base specs to support higher pricing, and increasing the importance of subscription services to boost lifetime revenue per user.
Samsung’s recent launch of the Galaxy Z Fold8 and Z Fold8 Ultra has seen year-on-year pricing rise by $100 for the 256GB and 512GB models, and $200 for the 1TB models. Xiaomi has announced price rises across its wider portfolio. Oppo, OnePlus and Vivo announced price rises for Q2 2026,
Qualcomm CEO Christiano Amon discussed the impact this is having on consumer confidence as they look for value for money.”Consumer preference within the premium category is changing towards a preference to the lower end of the premium, as well to last year’s phone, because of the memory price increases.”
iPhone 18 Pro Margins: Memory Inflation Squeezes Hardware
Apple Chief Executive Officer Tim Cook confirmed that exponential increases in memory prices are impacting hardware gross margins across the Mac, iPad, and upcoming iPhone lines.
The Mac and iPad portfolios have both seen mid-cycle price increases due to economic conditions unlikely to calm over the next year. Apple hedges across the supply chain, but these price rises illustrate systemic long-term pressure rather than short-term variations. Speaking during this week’s Q3 earnings call, outgoing CEO Tim Cook said that Apple is in ” what I would characterize as a 100-year flood on memory pricing with exponential increases in memory prices.”
Cook also noted that silicon costs will be higher in the September quarter, only partially offset by lower component costs and Apple’s inventory stockpile. Although he would not be drawn on future product pricing, the iPhone 18 Pro and iPhone 18 Pro Max are set for release in September and will be affected by the harsh trading conditions.
Disclaimer: This content has not been generated, created or edited by Finance SC. Publisher:
Source link
Source link
