TrendForce says iPhone 18 Pro costs Apple 38% more to make

Memory and processor cost increases mean the next iPhone 18 Pro will cost Apple 38% more to make, according to TrendForce – and that’s just for the 256GB model.

The analyst believes Apple will manage the cost increase by reducing goss margins and spreading increases across existing products with price increases. It is expected to raise the cost of the iPhone 17 this week, and recently increased prices across its product range.

TrendForce notes that memory’s share of total BOM cost has risen from around 10% a year ago to approximately 34% in 3Q26 – and expects this to exceed 40% in 1H27. 

“This marks a fundamental shift, where the application processor (AP) and display were once the dominant cost drivers,” TrendForce said.

The analyst reprises my current opinion that what’s bad for Apple is actually worse for everyone else.

“If even Apple—with its industry-leading profitability—is facing such pressure, Android smartphone vendors are likely to experience an even greater margin squeeze. Android brands will need to pass through a larger portion of rising component costs to remain profitable and avoid selling devices at a loss, resulting in steeper retail price increases than those expected for the iPhone,” they say.

“The pressures will be particularly acute in the entry-level and mid-range segments, where already-thin margins leave little room to absorb higher costs. With memory prices having risen five- to sevenfold since the beginning of 2025, many brands may have no choice but to implement substantial price increases or discontinue product lines that have slipped into negative gross margins.”

TrendForce expects the smartphone market to experience downward pressure in consequence of rapid increases in the cost of memory.

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