Ultimately, the burden of increased memory costs will fall on ordinary consumers.

On June 25, Apple raised the prices of several Mac and iPad models. For instance, the 128GB version of the iPad Air increased from $599 to $749, representing an average price hike of 20%. Interestingly, the iPhone was notably absent from this list of price increases.

Could it be that Apple has suddenly discovered its conscience? Not so fast—the real move may still be on the horizon.

According to IDC, following the price hikes on Macs and iPads, the standard iPhone 18 may see a $50 price increase, while the iPhone 18 Pro and Pro Max could rise by up to $200. Based on this speculation, the starting price of the iPhone 18 Pro could approach $1,299, with the Pro Max potentially reaching $1,399. In other words, the price of the iPhone 18 Pro in the Chinese market is likely to start at around 10,000 yuan.

(Image source: TechMansion)

For this round of price hikes, Apple claims that the AI boom is consuming a significant amount of storage production capacity, leading to rapid increases in procurement costs for DRAM (memory) and NAND (flash storage), making it difficult for the company to continue absorbing these costs.

However, as Apple was busy explaining these exaggerated costs, Micron voiced its own complaints. Micron executives hinted that during the previous downturn in the storage industry, some major customers relied on their purchasing leverage to drive prices to rock bottom, worsening manufacturer profit margins and forcing them to cut capacity investments. While Micron did not name names directly, the outside world naturally attributed this to Apple.

Apple complains that storage manufacturers are raising prices too aggressively, while Micron blames major customers for driving prices too low in the past. The two sides are busy arguing over who is responsible, but their ultimate solution is remarkably tacit: passing the costs onto consumers. Storage manufacturers like Micron, which sell memory at prices higher than gold, will enjoy soaring profits, while Apple's gross margins will also see a significant boost.

Apple's ability to control its supply chain has long been difficult for competitors to replicate. Its massive purchasing volume allows it to engage with multiple suppliers simultaneously, using order allocation to secure lower procurement prices.

When the storage market is oversupplied, Apple can lock in long-term contracts at low prices, and suppliers are willing to make concessions to retain such a major customer. Did these low prices ever benefit consumers? Apparently not.

It is understood that Micron's Chief Business Officer, Sumit Sadana, stated that when storage industry profits hit rock bottom in 2023, some customers continued to aggressively push for lower prices. Micron had already warned them that such practices would dampen investment willingness. Now, with AI data centers purchasing large quantities of high-bandwidth memory, and expanding capacity for ordinary DRAM taking time, the reduced capacity built in the past has quickly turned into today's shortage.

(Image source: X)

Xiaolei feels that these remarks carry a hint of irony. Apple has been adept at taking advantage of industry cycles to buy cheap in the past, but today it is being bitten by the same cycle. However, this bite seems to have not affected Apple's profits first but is instead targeting consumers' wallets.

Micron is not so wronged that it needs consumers to speak up for it. Its latest quarterly gross margin has approached 85%. While storage price hikes are causing headaches for Apple, they are also filling the pockets of upstream manufacturers. The entire situation resembles two high-margin players arguing over who should earn a little less, with consumers not even having a seat at the negotiating table.

The cost pressure Apple faces is also real. According to TechInsights, the memory and storage costs for the iPhone 17 Pro were around $50, but similar components for the iPhone 18 Pro could approach $200. The approximately $150 increase per unit is sufficient to explain Apple's motivation for raising prices.

(Image source: X)

The latest news indicates that Apple is seeking approval from the U.S. government to purchase chips from ChangXin Memory Technologies. ChangXin's core product is DRAM, and if this move materializes, it could add another supplier for runtime memory while putting some price pressure on Samsung, SK Hynix, and Micron. As for the NAND capacity costs of the iPhone, Apple will still need to find another solution.

This actually exposes Apple's true approach: profits accumulated during favorable supply chain conditions are kept for itself, while increased pressures during adverse supply chain conditions are passed on to the market. Apple could certainly afford to earn a little less or offset some of the price hikes through cost optimizations in other components, but it ultimately chooses to raise prices further, apparently believing that high-end users will still pay up.

However, a bigger issue arises: despite the price hikes, the upgrade points of the iPhone 18 series remain unclear.

It is understood that the iPhone 18 Pro, Pro Max, and foldable models, set to be released in autumn 2026, will still feature 12GB of memory. The standard iPhone 18 and iPhone 18e will not debut until spring 2027, with memory increasing from the current 8GB to 9GB.

9GB is indeed somewhat novel in today's smartphone market. Android flagships commonly feature 12GB and 16GB, but Apple has chosen the most peculiar number between 8GB and 12GB, just a bit more than the previous generation while avoiding encroaching on the Pro series' configuration. If this was solely the decision of engineers, Xiaolei is somewhat skeptical; the involvement of the finance department and product managers seems more plausible.

The standard iPhone 18's 9GB of memory may adopt a combination of 1.5GB×6 dies, whereas the current 8GB solution uses 2GB×4 dies. A die refers to the DRAM chip within the package, and six dies do not equate to six independent memory chips on the motherboard.

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Is the extra 1GB useful? Actually, yes. Compared to 8GB, 9GB represents a 12.5% increase, providing a bit more space for the system and on-device models while potentially reducing the frequency of background apps being cleared. The capacity is a genuine upgrade, but the magnitude remains modest. If the standard model only sees a $50 price increase, users can at least console themselves with the extra 1GB; however, if the Pro series maintains 12GB but charges an additional $200, it becomes difficult to accept with a smile.

This raises a more critical question: Can on-device AI still deliver?

Xiaolei believes that on-device AI has practical value. Offline summarization, photo organization, and privacy-related personal information processing are all suitable tasks for completion on the phone, offering more stable response times. However, phones have clear limits in terms of memory, cooling, and battery life, making it impractical for them to handle complex reasoning and prolonged Agent tasks independently. If only small models of this scale are running on the phone's on-device AI, Apple really doesn't need to force an additional 1GB of memory.

(Image source: X)

Therefore, the A20 Pro chip rumored to be featured in the iPhone 18 Pro is said to adopt a 2nm process and WMCM packaging, moving the DRAM from the top of the chip to the side to improve cooling and communication efficiency. The rumored 96-bit wide LPDDR6 and expanded neural engine are also aimed at making space for on-device AI. However, as for when Chinese consumers will be able to use Apple's AI, it remains unclear for now.

Apple has always adopted a hybrid approach to AI, handling simple tasks on the device and delegating complex reasoning to Private Cloud Compute. The 2026 solution even extends some high-load tasks to NVIDIA GPUs on Google Cloud. While Apple emphasizes on-device AI, what it is actually building is a hybrid end-cloud system.

Although everyone knows that AI on phones, whether on-device, cloud-based, or hybrid, can only be considered small-scale and cannot compare to enterprise-level Agents, recent discussions about cloud computers, cloud OS, AI browsers, and AI assistants suggest that future terminals may serve more as gateways. The actual work is done by Agents in the cloud, opening browsers, running software, and preserving the state of previous tasks. Users can log in from a different lightweight device, and tasks can continue seamlessly. This idea is indeed attractive for Agents that need to run around the clock.

Alibaba Cloud's Wuying is exploring this direction. Its AgentBay places cloud-based browsers, code environments, desktops, and mobile device operations into isolated runtime spaces, allowing Agents to complete web operations or file processing in the cloud. Enterprises can also create and reclaim environments based on tasks. Compared to buying a separate Mac mini for each employee, this approach offers more convenient unified permissions and elastic scaling while preventing Agents from directly accessing files on employees' personal computers.

(Image source: Alibaba)

This raises questions about Apple's justification for raising prices. As more AI capabilities rely on the cloud, why should consumers pay such a high premium for on-device hardware in advance? They pay once when buying the phone and may have to pay again for cloud services in the future. This "double charging" is what users should truly be wary of.

IDC predicts that global smartphone shipments may decline by 13.9% year-on-year in 2026, but average selling prices will continue to rise. Using an older iPhone with surplus performance for another year is not difficult. When the core selling points of new phones focus on temporarily invisible AI potential, consumers' most direct response is to extend their upgrade cycles.

Returning to the original question: Who will ultimately foot the bill for the $200 price increase on the iPhone 18 Pro?

Xiaolei does not deny that AI is driving up hardware costs for phones, and advanced processes and new packaging also require significant investment. What consumers care about is how much genuine experience they get in return for their money. Especially for Chinese users, with core AI features still not fully implemented, asking them to pay a premium for AI hardware in advance seems somewhat unreasonable.

(Image source: X)

On-device AI has its place, and cloud AI will increasingly handle more complex tasks. Apple can continue to optimize the division of labor between the two, and cloud computers like Alibaba Cloud's Wuying will also find their market among enterprise-level Agents. However, none of these grand technological routes automatically justify iPhone price hikes.

Without sufficient "strength" to prove that the iPhone's price increase is reasonable, Apple fans may simply respond with "no buy."

iPhone, Apple, storage, smartphone, memory

Source: Lei Technology

Images in this article come from: 123RF Royalty-Free Image Library. Source: Lei Technology