Apple’s steady iPhone prices are a strategic shield, not a permanent promise
iPhone pricing trends describe how Apple adjusts or holds iPhone prices over time in response to component cost increases, supply constraints and competitive pressures in the broader smartphone supply chain, shaping both its market share and profitability. Apple’s choice to keep iPhone prices steady in the face of rising costs is less an act of generosity and more a calculated bet on timing. The company has been absorbing higher bills of materials while competitors pass costs straight to buyers, and that has helped Apple gain ground in revenue share and perceived value. But the data and the supply-chain warnings point to a simple conclusion: this shield is temporary. If memory prices keep climbing and supply stays tight, Apple will eventually move from absorbing costs to sharing them with customers.
Cost absorption gave Apple a lead—Q2 numbers prove it
Apple’s cost-absorption strategy has been spectacularly effective in the short term. Amid RAM-related smartphone price hikes, Apple pulled ahead of rivals in the latest quarter, thanks in part to steady iPhone pricing. According to Counterpoint Research, Apple reached its highest-ever second-quarter revenue share at 49%, while its revenue grew 22% year-on-year to a record Q2 level. That outperformance is not an accident. Counterpoint’s Tarun Pathak notes that, "Unlike peers that pushed through steep price increases, Apple kept pricing largely stable, reflecting its ability to absorb rising BOM costs and remain insulated from the memory crisis." By choosing not to shock buyers with higher price tags, Apple made iPhones look like better value as Android brands lifted prices. The result: Apple’s relative position strengthened even as component costs rose in the background.
The smartphone supply chain is under strain—and Apple knows it
Behind those calm iPhone price tags sits a tense smartphone supply chain. Outgoing CEO Tim Cook called the company’s latest June quarter its “strongest June quarter ever,” with Q3 revenue at USD 109.4 billion (approx. RM502.2 billion), up 16% year-on-year. iPhone sales alone reached USD 54.3 billion (approx. RM249.8 billion). Yet in the same breath, he warned of potential supply issues for iPhones and other products in the months ahead and flagged that supply constraints are set to “increase significantly sequentially.” Cook points out that the DRAM market effectively depends on three suppliers, a narrow base that limits flexibility on both supply and pricing. At the same time, Apple has already raised prices on other product lines after what a company spokesperson called an extraordinary surge in demand for memory and storage driven by AI data centres, describing component price increases as unlike anything they had seen before.
Android brands are already blinking under rising component costs
If you want to see what happens when cost absorption hits its limit, look at Android manufacturers. Apple’s peers have already pushed through steep price increases as component costs climb, particularly for memory. Apple’s biggest competitor has raised smartphone prices and still only captured a 16% revenue share in Q2, with revenue and shipments up 9% year-on-year. Vertical integration and tighter control over component sourcing have helped it manage input costs, but not enough to avoid higher shelf prices. Others have fared worse: one major Chinese brand saw the steepest shipment decline among the top five even as its average selling price jumped 13% year-on-year, leaving it exposed to the memory crisis because of its heavy reliance on entry- and mid-tier models. These moves signal an industry reality: when memory costs spike and stay high, most manufacturers choose price hikes over margin collapse.
Why iPhone prices are likely to follow—and what the warning signs say
The uncomfortable direction of travel is already laid out. Counterpoint expects that “Apple will likely increase prices in the coming quarters,” a logical next step once cost absorption runs out of road. Tim Cook has been cautious, saying it is too early to reach a definitive conclusion on iPhone price hikes because channels and customers need time to adjust, but that uncertainty is precisely the point. Apple’s own outlook has turned more guarded, with projected Q4 growth of 9% to 11%, below earlier benchmarks, and Cook warning that memory pricing beyond September will have an “increasing impact” on the business. Meanwhile, the broader market is shifting: global smartphone revenue hit USD 109 billion (approx. RM501.4 billion) in Q2, up 7% year-on-year, even as shipments fell—because average selling prices rose 17% to USD 400 (approx. RM1,840) per unit. The conclusion is hard to avoid: Apple can delay price hikes longer than most, but not forever.
