Apple’s iPhone 18 Strategy: Mitigating DRAM Costs and Leveraging Market Volatility for Competitive Edge, Analyst Notes Services Revenue as a Strong Buffer

As prices for DRAM and NAND flash memory continue to escalate, Apple has found itself at the center of intense speculation regarding the potential pricing strategy for its upcoming iPhone 18 series. Many industry analysts are questioning whether this new lineup will see a surge in cost when it launches later this year.

Recent reports suggest that Apple has managed to secure Long-Term Agreements (LTAs) for DRAM supply only through the first half of 2026. An earlier forecast indicated that higher-storage versions of the iPhone 18 might experience price increases. However, one analyst contends that Apple could leverage the current market volatility by absorbing the rising chip costs. Given the robust revenue generated by Apple’s Services division, the company may find the necessary financial buffer to counterbalance any increases in manufacturing expenses.

Shifts in iPhone 18 Memory Pricing Strategies

According to renowned analyst Ming-Chi Kuo, Apple has transitioned from negotiating DRAM supply contracts every six months to a new quarterly framework, introducing a more dynamic pricing structure. This adjustment means that pricing fluctuations can occur more frequently, affecting production costs directly.

Kuo has expressed optimism about Apple’s chances of avoiding price hikes for the iPhone 18. He argues that the company is in an excellent position to capitalize on the current DRAM crisis. By maintaining stable pricing at launch, Apple could enhance its market share significantly. Furthermore, consistent revenue from its Services segment could help absorb the additional costs without passing them onto consumers.

A few quick thoughts on Apple/iPhone memory price hikes:1. The 1Q26 LPDDR price hikes mentioned in the news are pretty close to what I’ve heard. NAND flash increases, however, are a bit lower.2.iPhone memory pricing is now negotiated quarterly instead of every six months, so…

— Ming-Chi Kuo (@mingchikuo) January 27, 2026

By choosing not to increase prices, Apple would also implement a compelling marketing approach, distinguishing itself from competitors who are less likely to absorb rising DRAM pricing. Reports indicate that Apple currently pays approximately $70 for each 12GB of LPDDR5X RAM, a staggering 230% increase compared to their costs at the start of 2025. This strategic pricing model could similarly apply to its Mac lineup, positioning Apple to gain an advantage over notebook competitors struggling with their own supply chain issues.

For further updates, stay connected with industry insiders like Ming-Chi Kuo.

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