Apple could soon face what could be one of the biggest shifts in iPhone costs, with memory expenses projected to quadruple by 2027. This could reshape how it prices its upcoming flagships. According to JPMorgan analysis cited by the Financial Times, memory could account for as much as 45% of an iPhone’s component costs by 2027. This is a significant jump from the current 10%.
iPhone memory costs to quadruple by 2027 as AI demand limits supply
Apple has been one of the largest customers in the memory category. It buys memory for around 250 million iPhones a year. However, the tables have turned now. From the position of dictating, Apple has come to a position where it has to compete with rivals for supply. The principal reason is the massive, subsidized AI infrastructure boom.
Companies like NVIDIA are reportedly outbidding consumer electronics makers for a limited supply from Samsung, SK Hynix, and Micron to build data centers that can handle more compute for advanced AI. Meanwhile, cloud companies are reportedly paying billions upfront to lock in supply. This apparently breaks the usual industry practice of first committing to volume with suppliers and then negotiating prices later.
Absorb the increasing costs or pass onto customers
This shift in dynamics seems to be changing Apple’s usual product plans, including a staggered iPhone 18 series launch. Apple is believed to debut only the iPhone 18 Pro models this fall, along with the foldable iPhone. The standard iPhone 18 could move to the early months of 2027.
John Ternus will take up the Apple CEO role on September 1st as Tim Cook transitions to executive chair. Meanwhile, his first big decision will be whether the company absorbs increasing memory costs or passes it on to customers.
Bank of America analyst Wamsi Mohan says the decision could come down to whether Apple keeps prices low to gain market share in regions like India and China or protects margins by increasing prices. “By the time September rolls around, Apple has two choices: one, they reprice products higher, or two, they say ‘let’s go ahead and gun for market share,” Mohan told the FT. The analyst predicts that Apple may opt for market share.
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