Have you ever wondered why your next phone upgrade might feel like a high-stakes poker game played between multi-billion dollar giants? It turns out, behind the sleek glass and titanium of your favorite device, there is a brutal war happening over tiny slivers of silicon called DRAM. As we look toward the launch of the iPhone 18 later this year, the tech world is buzzing with one question: will Apple pass the bill for record-high chip prices onto you, or will they play it cool and eat the costs themselves?
The increasing DRAM and NAND flash prices have made Apple one of the more popular companies that have been discussed in a multitude of reports, as there’s always a conversation ensuing on whether the iPhone 18 series will become more expensive when the lineup launches later this year. With the technology giant reportedly only securing DRAM supply LTAs (Long-Term Agreements) for the first half of 2026, an earlier rumor claimed that higher-storage variants of the iPhone 18 will witness a price hike. An analyst, however, is of the opinion that Apple should take complete advantage of the market chaos by absorbing the chip costs, and given that its Services division continues to rake in money, this business will provide sufficient financial protection.
The DRAM Crisis: Why Chips Are Costing a Fortune
So, why is this happening? Basically, the whole world has gone AI-crazy. All those massive data centers training Large Language Models (LLMs) are gobbling up the world's supply of high-performance memory. This has left smartphone makers scrambling for the leftovers, driving prices through the roof.
TF International Securities’ analyst Ming-Chi Kuo has provided some details on X related to Apple’s DRAM pricing dilemma, with the company previously reported to have sent executives on long-term hotel stays to set up deals with memory makers Samsung and SK hynix. According to Kuo, Apple can no longer set up DRAM supply deals every six months, with the pricing subject to change every three months instead.
The Math Behind the Phone
Price Explosion: Currently, Apple is expected to pay $70 per 12GB of LPDDR5X RAM, which is a 230 percent premium compared to the figure it was paying its supply chain at the beginning of 2025.
Negotiation Fatigue: Instead of locking in prices for a year, Apple is now fighting for better rates every quarter.
Market Pressure: While competitors might hike prices to protect their thin margins, Apple has a "secret weapon" that others don't.
The Master Plan: Absorbing the "Chaos"
The best-case scenario for Apple is to avoid any kind of price hike, with the analyst mentioning that it is the ideal opportunity to take advantage of the DRAM crisis. Instead of raising prices, if Apple keeps its hand firm for the iPhone 18 launch, it will have an opportunity to boost its market share considerably.
Keeping the price flat will also be an excellent marketing strategy, as no other company is expected to absorb DRAM costs. If every other flagship phone goes up by $100 while the iPhone 18 stays at $799 or $999, Apple effectively wins by doing nothing. This same strategy can be applied to its Mac lineup, and in adopting this stance, Apple has a chance to chip away at the market share of its notebook competitors.
Services: The Ultimate Financial Cushion
You might be asking, "How can Apple just lose money on hardware?" The answer lies in your monthly subscriptions. Also, its Services division, which has continuously generated stable revenue for the Cupertino firm every quarter, could offset the price absorption.
Every time you pay for iCloud+, Apple Music, or Apple TV+, you are helping Apple subsidize that expensive RAM chip in your pocket. It is a brilliant move in macroeconomics. By getting more people into the "ecosystem" with a reasonably priced phone, they lock in years of high-margin service revenue.
Global Economics and International Politics
This drama isn't just happening in a vacuum. It is deeply tied to international politics and geopolitical tensions. The main memory suppliers—Samsung and SK hynix—are based in South Korea, a region that is a central hub for international trade but also a flashpoint for regional security concerns.
The Macro View
The economic impact of AI demand is rewriting the rules of the labor market in Silicon Valley and beyond. As companies prioritize "AI Servers" over "Consumer Electronics," we are seeing a shift in supply chains that could last for years. Economic growth in the hardware sector is currently being cannibalized by the "AI gold rush," and Apple is one of the few players with enough cash—and enough foreign investment clout—to stand its ground.
Main Points of the Strategy
Quarterly Battles: Apple is now negotiating chip prices every 90 days instead of twice a year.
Market Share Over Margin: Absorbing costs now to steal customers from Samsung and Google.
The "Ulysses" Factor: With the iPhone 18 potentially using the new 2nm SF2P process, every dollar saved on RAM is a dollar that can go into the expensive new processor.
Services to the Rescue: High-margin subscriptions act as a safety net for hardware losses.
Predictability: Keeping prices stable helps avoid "sticker shock" during a period of global inflation and economic sanctions.
Frequently Asked Questions (FAQ)
Q: Will the iPhone 18 really stay at the same price as the iPhone 17? A: That is the goal. Analysts believe the base model will stay flat, though "Pro" and "Ultra" versions with massive storage might still see a small hike to cover the NAND costs.
Q: Why doesn't Samsung just give Apple a better deal? A: Because Samsung’s memory division is a separate business. They want to make as much profit as possible, especially since AI companies are willing to pay triple for the same chips.
Q: Is Apple still using 8GB of RAM? A: Not for the flagship. With "Apple Intelligence" requiring more memory, the iPhone 18 is expected to start at 12GB of RAM, which is exactly why the price of that chip matters so much.
Q: What happens if Apple can't secure enough chips? A: We might see "rolling launches" or delays for certain models, similar to what happened during the 2021 chip shortage.
Conclusion: The Long Game
At the end of the day, Apple's iPhone 18 launch plan is about more than just a phone; it's about an ecosystem. By absorbing the "market chaos" and refusing to pass the economic repercussions of the chip shortage onto you, Apple is making a bet on your loyalty. They want you in the garden, and they're willing to pay a premium to make sure you don't wander off to a cheaper competitor.
As international trade becomes more complex and geopolitical tensions continue to rattle supply chains, having a trillion-dollar cushion of Services revenue makes Apple the most "predictable" player in an unpredictable world. It’s a masterclass in microeconomics—losing the battle on hardware to win the war on user base.
"Contact us via the web."
Sources
Apple DRAM Pricing Negotiations Shift to Quarterly - Ming-Chi Kuo (X)
iPhone 18 Memory Costs vs. Services Revenue Cushion - Wccftech
Apple's Q1 2026 Earnings and Services Growth - Apple Newsroom
Libellés: iPhone 18, Apple DRAM, Ming-Chi Kuo, international conflicts, geopolitical tensions, economics, economic impact, labor market, international trade, economic sanctions, macroeconomics, microeconomics, economic growth, foreign investment, supply chains, growth, Services revenue, Apple A20 chip.
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