Apple’s iPhone 18 Pro could cost a lot more, thanks to the chip shortage

The iPhone 18 Pro’s prices could go up this year, largely due to ongoing chip and memory shortages.

When speaking to The Wall Street Journal (WSJ), Apple CEO Tim Cook said that price hikes were “unavoidable,” and that “we’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.”

Now, The Wall Street Journal notes that part of the reason for the chip shortage is AI demand.

Essentially, the rapid build-out of AI data centres led chip manufacturers to shift production of DRAM (dynamic random access memory) and NAND flash storage toward more enterprise-scale components rather than consumer devices. Mike Howard, director of memory markets for TechInsights, told the WSJ that prices for these components (noting the 12GB of DRAM and 256GB of flash storage found in the iPhone 17 Pro) are projected to quadruple in the fall compared to last year.

Howard also estimated that the tech giant paid roughly US$39 (C$55.29) for the 12GB of DRAM in the 17 Pro, but in the 18 Pro, the same 12GB of DRAM could cost a staggering US$145 (C$205). For the flash storage, Howard says Apple paid around US$ 13 (C$18 CAD), with the price potentially jumping to US$51 (C$72 CAD).

In fact, Wayne Lam, service director of wireless components for TechInsights, told the WSJ that, including the DRAM and flash storage, the iPhone 17 Pro costs the company about US$582 (C$825) to produce, while the iPhone 18 Pro could jump to US$726 (C$1029). With TechInsights noting that Apple’s estimated profit margin on the iPhone 17 Pro is 47 per cent, the iPhone 18 Pro could have a price of US$ 1,299 (C$1,841). For perspective, the iPhone 17 Pro starts at $1,599 in Canada.

Source: The Wall Street Journal