Memory prices have surged five to seven times since early 2025. Apple responded by lifting iPhone prices as much as $300. Yet that move only hints at what’s ahead.
Tim Cook called the spike a “100-year flood.” He warned investors on the March-quarter earnings call that memory costs would hit harder in the June quarter and keep climbing. The TrendForce smartphone industry report published August 10 confirmed his point in stark numbers. Yahoo Finance laid out the details two days later.
Memory’s share of the iPhone Pro bill of materials jumped from about 10 percent on the iPhone 17 Pro to 34 percent in the third quarter of 2026. Analysts expect it to top 40 percent in the first half of 2027. For the iPhone 18 Pro with 256 gigabytes of storage, the bill of materials itself is forecast to rise 38 percent year over year. Higher retail prices look unavoidable.
But Apple didn’t wait for the next model cycle. It has already passed on some of those costs. The company raised prices on existing iPhone models in Japan last month. The iPhone 17 Pro Max moved from ¥194,800 to ¥214,800, an 10.3 percent increase. Similar bumps hit the rest of the lineup, from the iPhone 17e up 8 percent to the iPhone Air up 11.3 percent. Apple blamed the yen’s slide against the dollar. No other major market saw changes. PhoneArena first reported the shift on July 18.
Those Japan-only adjustments came after broader increases across Macs, iPads and services. iPhones had been spared in June. Now they aren’t. The pattern shows Apple testing consumer tolerance in select markets before wider moves.
Mark Gurman sees no ambiguity. “There is absolutely no doubt that Apple will raise iPhone prices, for a variety of reasons,” he wrote in his Power On newsletter. Memory shortages top the list. The new variable-aperture lens expected in the iPhone 18 Pro camera system adds further expense. Gurman points to recent Mac and iPad hikes as a roadmap. He anticipates $100 to $200 increases on flagship models this fall. A folding iPhone Ultra, if it arrives, could start at $2,000 or higher. Macworld covered his comments August 3.
Google just gave the industry another data point. The company raised Pixel 11, Pixel 11 Pro and Pixel 11 Pro XL prices by $100 each. Base storage on several models increased to 256 gigabytes. Trade-in promotions received top billing on product pages, effectively masking the full sticker price until users decline. Analysts tie the move to the same memory cost pressures squeezing Apple. Some estimates suggest the iPhone 18 Pro could cost $270 to $300 more to build while preserving margins. MacRumors reported the Pixel changes August 12.
Suppliers are thriving. Micron Technology posted fiscal third-quarter revenue of $41.456 billion, up 345.7 percent from a year earlier. Its GAAP gross margin reached 84.6 percent. DRAM prices rose in the mid-60 percent range during the quarter. NAND climbed into the high 70s. Chief Executive Sanjay Mehrotra said the company can meet only 50 percent to two-thirds of key customer demand. Shares have more than tripled this year. SK Hynix, Apple’s other main DRAM partner, reports comparable gains.
Apple’s own numbers tell a tale of resilience mixed with strain. iPhone revenue hit $54.25 billion in the June quarter. Total company revenue reached $109.42 billion. Gross margin guidance came in at 47.5 percent to 48.5 percent. Jefferies analysts downgraded the stock to Underperform with a $730.66 price target. They cited rising memory costs and the cancellation of a planned all-glass iPhone design that might have supported higher average selling prices. Apple shares closed recently at $306.32, up 13.7 percent year to date.
The memory surge isn’t isolated. It reflects broader supply constraints across the smartphone sector. Contract prices have multiplied since 2025. TrendForce analysts warn that escalating component costs, led by memory, will push production expenses for the iPhone 18 series significantly higher. Apple could absorb some of the hit by trimming gross margins. Consumer demand might soften if sticker prices climb too fast.
Yet history suggests buyers have accepted premium pricing before. The iPhone X launched at $999 in 2017. The current iPhone 17 Pro starts at $1,099. That $100 difference over nearly a decade looks modest given the added screen size, cameras and processing power. Stability in flagship pricing may finally break.
Trade-in programs and financing options will blunt the impact for many. Google leaned heavily on them. Apple already promotes both aggressively. The strategy lets companies advertise effective prices hundreds of dollars lower than list while still booking higher revenue per unit.
Longer term, the pressure could accelerate shifts already underway. More buyers may opt for last year’s models at reduced prices. Refurbished units could gain share. And the premium segment, where iPhone dominates, has shown surprising strength even as overall smartphone volumes dip.
Counterpoint Research noted earlier this summer that the bill of materials for a next-generation iPhone 18 Pro Max could jump nearly $300 from last year’s roughly $500 level. The Motley Fool highlighted those figures July 16, calling the increase great news for memory suppliers but a challenge for Apple.
So far Wall Street has shrugged off the near-term risk. But if the iPhone 18 arrives with starting prices $200 higher across the Pro lineup, the conversation will change. Margins might compress. Volume could slip. Or Apple could once again prove that its customers will pay for perceived superiority.
The memory flood Tim Cook described isn’t receding yet. Suppliers remain capacity constrained. Prices keep rising. And the next round of iPhones will carry those costs straight to the retail shelf. How much higher remains the open question. The answers coming this fall will matter to every player in the supply chain.