Apple is facing mounting pressure to raise iPhone 18 prices as component costs climb sharply, led by expensive next-generation memory and chip technology. According to Counterpoint Research, the bill of materials for the 1TB iPhone 18 Pro Max could increase by nearly $300 compared to the prior generation, with storage costs alone exceeding $250 and Apple’s anticipated move to a 2‑nanometer application processor adding further expense. While Apple may offset margin pressure through supplier negotiations, carrier promotions, and pushing customers toward higher storage tiers, analysts warn that uniform price hikes across all models could dampen upgrade demand, particularly in price‑sensitive markets like China.
As the September launch nears, Wall Street is tuning in. Citi Research analyst Asiya Merchant raised her Apple price target from $315 to $365—implying 16% upside—while maintaining a Buy rating. She views the iPhone 18 cycle as a critical catalyst, expects price increases concentrated on premium models, and highlights the potential for foldable devices later in 2026. Merchant also sees eventual upside from enhanced Siri capabilities and tiered AI services that would bolster high‑margin Services revenue. The bullish note comes ahead of Apple’s July 30 earnings, where iPhone revenue—which contributed nearly $57 billion last quarter—will be in sharp focus.
However, a legal battle with former AI partner OpenAI adds an element of uncertainty. Apple has sued the company, alleging trade‑secret theft “at every level” to develop competing hardware; OpenAI has denied the claims. The suit marks a stark turn in the once‑close relationship and raises questions about Apple’s internal AI development trajectory. Together, these developments—cost‑driven pricing decisions, analyst optimism, and the OpenAI dispute—paint a complex picture for Apple’s next growth chapter.
