iPhone Production Costs Surge to 'Irrational' Levels, Impacting Apple and Android Makers
Jakarta, CNBC Indonesia - Research firm TrendForce has revealed that Apple is facing a rise in component costs that is directly impacting the production cost of the iPhone 18. The technology giant is reportedly making efforts to avoid increasing the retail price for consumers.
TrendForce cited the example of the Bill of Materials (BOM) for the 256 GB iPhone 18 model, which is likely to surge by up to 38% year-on-year (YoY).
“Apple may offset some of the costs by reducing its gross profit margin to prevent weakening consumer demand. The goal is to keep prices affordable, maintain shipment volumes, and increase market share,” TrendForce explained on its official website.
Based on its analysis for the 256 GB iPhone Pro variant, the BOM has been increasing continuously. TrendForce noted a rise from 10% a year ago, surging to 34% in the third quarter of 2026, and is expected to exceed 40% in the first half of next year.
For the iPhone 18, Apple is likely to implement a strategy similar to its latest MacBook launch. At that time, the company sacrificed a portion of its gross margin so that the selling price did not increase, which ultimately helped maintain shipment volumes.
Another possibility is that the company will review its pricing strategy for older iPhone models. According to TrendForce, Apple could potentially raise the prices of older series concurrently with the launch of its newest series as a measure to offset the rising memory costs.
On the other hand, the burden borne by Android phone manufacturers is said to be much heavier. While Apple—as the industry’s most profitable company—is experiencing this pressure, Android manufacturers will likely pass most of the increased component costs onto consumers to maintain profits and avoid losses.
The heaviest pressure will be felt in the entry-level and mid-range phone segments. The very thin profit margins in these segments leave little room to absorb the higher production cost surges.