Apple (AAPL) Clearly the margin is opting for pain rather than sticker shock.
Memory prices are rising due to relentless AI data center demand, but Apple is looking to increase iPhone prices, even if it means taking a bottom-line hit.
Analyst Ming-Chi Kuo, a veteran of covering Apple’s supply chain for several years, says the tech giant will stick to its vision when it makes the anticipated launch. iPhone 18At least for now.
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That decisive decision puts Apple’s supply-chain strength under the scanner as it approaches earnings. Thursday, January 29, 2026 (after market close).
After covering the memory space extensively over the past few months, it’s clear that suppliers have a ton of leverage for the foreseeable future.
Bellwethers in space, eg micronMammoth fabs are being built to ease supply disruptions, but many of those efforts are long-term, pointing to a potential problem in at least a few years.
Naturally, most hardware companies have little choice but to raise prices, but Apple is not your average hardware company.
Apple can take hits and is more insulated than any other hardware company in history, potentially becoming its biggest strength in the midst of a memory crunch.
Apple plans to keep iPhone 18 prices steady as memory costs continue to pressurize near-term marginsGetty Images by Axelle/Bauer-Griffin” loading=”eager” height=”686″ width=”960″ class=”yf-lglytj loader”/>
Apple plans to keep iPhone 18 prices steady as rising memory costs pressure near-term margins.Excel and Sol at Getty Images; Photo by Bauer-Griffin ·Excel and Sol at Getty Images; Photo by Bauer-Griffin
According to TF International Securities According to analyst Ming-Chi Kuo, Apple is looking to take on China with higher memory costs rather than risk the iPhone pricing boat.
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Cuo’s reading suggests that Apple sees an opportunity that effectively plays to its scale and massive supply-chain muscle.
In a post on X, Kuo acknowledged that higher memory costs will affect the iPhone’s gross margins. But as we said,
Kuo boils down Apple’s thinking to three key moves.
Now absorb the pain: Memory prices are rising at an incredible pace, and Apple is opting for margin pressure rather than consumer feedback.
Lockdown Supplies: Apple’s scale enables it to effectively secure components that others cannot, even as shortages worsen.
Play the long game: Any near-term margin hit will be viewed as temporary, with services revenue likely to backfill over time.
However, there is a significant risk of not containing these pressures, as Kuo notes that iPhone memory prices are still being renegotiated on a quarterly rather than semiannual basis.
For now, he feels that “2Q26 QoQ growth looks similar to 1Q26.“
Therefore, that dynamic makes Apple’s upcoming earnings commentary doubly important, as what it says about memory, supply, and cost pressures may come from beyond the company itself.
Apple will report it Tomorrow’s holiday-quarterly earningsSeeing a familiar mix of growth and pressure points.
iPhone sales It is expected to deliver their healthiest year-on-year profit in more than four years, led by premium pro demand and a rebound in China.
Related: Morgan Stanley resets Apple stock forecast ahead of earnings
Services Even with regulatory hurdles in Europe, the bottom line will continue to do the heavy lifting. Perhaps the biggest wildcard is margin pressure from skyrocketing memory costs, which Apple is willing to absorb.
All of this is looming AI, with more developments on the way Siri Next up after the deal with Apple Google’s Gemini.
By Apple’s last quarter (Q4 2025) numbers
Total Net Sales:$102.47 billionabove 8% year-on-year ($94.93 billion vs.), Beating the consensus Expectations approx $102.1 billion.
EPS (Thin):$1.85compared with $0.97 A year ago (the previous year’s figure was affected by a one-time tax charge), and before consent A close approximation $1.77.
Gross Margin (Dollars):$48.34 billionup from $43.9 billion In the prior-year quarter, reflecting strong operating leverage despite cost pressures.
Net Income:$27.46 billionAlmost double from $14.74 billion A year ago, underscoring the earnings power of Apple’s mix and scale. Source: Apple Inc., Q4 FY2025 Form 10-K
The iPhone 17 series has been an outlier for Apple, and analysts agree.
According to figures cited by IDC ReutersApple is expected to ship approx 247 million iPhones in 2025above 6% year-on-yearDriven by excellent demand, especially in China.
Bank of America is expecting a strong December quarter for Apple, and in the earnings preview I covered, it raised its iPhone unit sales estimate for the quarter. 85 millionProjecting 17% year-over-year growth.
On top of that, BofA’s modeling 13% year-over-year service growthA remarkable performance given the laxity in China’s app store trends.
According to recent reports, Apple’s iPhone 18 cycle may not reveal the usual single September “all-at-once”.
Related: Samsung Drops Galaxy S26 Ultra Bombshell
Bloomberg’s Mark Gurman suggests that Apple may prefer it Premium iPhone 18 models in Fall 2026 (likely September)And then push the base back iPhone 18 model and cheaper “18e” in spring 2027 (around March).
This stretches things out for Apple, and with price skimming quickly on the menu, sticker prices could dictate Apple’s effective pricing even if things don’t move.
Fall 2026 (Premium Wave):
iPhone 18 Pro.
iPhone 18 Pro Max
The first foldable iPhone Being discussed as part of a forecasted premium wave $2,000 to $2,500.
Spring 2027 (mass-market wave):
Apple has reset the pricing ladder with the iPhone 17, effectively resetting the pricing ladder with the latest model. High base storage With familiar headline rates:
iPhone 17: Market From $799; Apple list $829 If you “connect later” (256GB).
iPhone Air: From $999 (256 GB).
iPhone 17 Pro: From $1,099.
iPhone 17 Pro Max: The Apple Show $1,199 for 256GB (and $1,399 for 512GB). Source: Apple.
Related: Veteran Analyst Drops Bombshell Call on Intel Stock
This story was originally published by TheStreet on January 28, 2026, where it first appeared in the Technology section. Add TheStreet as a preferred source by clicking here.
