The cost to build the next flagship smartphone from Apple is going up a lot. According to a new report from Counterpoint Research, the upcoming model will cost about $300 more to manufacture than the current version. This massive jump is mostly because of the rising prices for memory chips and a brand new processor. This means buyers will likely have to pay a much higher retail price when the new phone finally hits store shelves.
More expensive memory and a new processor drive up costs
The global shortage of memory chips is the biggest reason for this sudden price jump. Demand for artificial intelligence servers has made parts like NAND storage and DRAM much harder to find. Counterpoint Research estimates that just the memory alone will cost almost as much as all the parts combined in the older models.
Beyond just the memory, the iPhone 18 Pro will also feature a brand new A20 processor. This chip uses a new two-nanometer manufacturing process that offers better performance but costs a lot more to make. While the cost of the display screen might actually go down a little bit, the new variable aperture camera system will also add some extra expense to the final bill.
Higher retail prices are coming across all the storage models
Faced with a $300 increase in production costs, the company will have to pass some of that expense on to the customer. Buyers looking at the high-capacity 1TB or 2TB models of the iPhone will feel the biggest impact. Analysts expect an average retail price hike of about $200 across the entire lineup.
Even with these higher prices at the register, the manufacturer will likely see lower profit margins than it did last year. Rather than doing a flat price increase for every single phone, the company will probably adjust prices differently based on how much storage space you want. If you plan to buy the top-tier model, you should start saving up now because it could easily push close to the $1999 mark.
