Apple is intending to use proprietary artificial intelligence requirements to trigger a non-discretionary hardware replacement cycle across its global install base. When Apple’s iPhone 18 Pro launches on September 9 this year, it will be more expensive than last year’s model.
Thanks to ongoing economic headwinds affecting memory and storage, analysts are predicting retail prices could rise by up to $200. Unlike the Android-powered competition, Apple’s corporate strategy enables it to better absorb higher bill-of-materials and retail prices to retain its margins.
With a mix of hardware dependencies, consumer friction, and the implicit need for its dedicated fanbase to upgrade to secure the best iPhone experience possible, Apple should come through the current silicon supply issues in a stronger financial position than its competitors.
Although Apple has supported its iPhone hardware for many years, not every feature can be backported to phones sold in 2019. Much of the iPhone install base cannot run the full suite of Apple Intelligence software that will be bundled with iOS 27.
Advanced on-device techniques such as generative AI and neural processing models will require 12 GB of memory, a mandated limit that only the iPhone Air, iPhone 17 Pro and iPhone 17 Pro Max can meet. The company’s community has been waiting years for Apple Intelligence and Siri AI to deliver on the promises made at the Worldwide Developer Conference 2024.
The iPhone 18 Pro and 18 Pro Max, alongside iOS 27, will deliver on these promises. There is a lot of pent up demand for Apple’s implementation of AI, and that demand will be seen in the iPhone 18 Pro sales.
Apple knows it can pass on the volatile manufacturing costs directly to consumers, safe in the knowledge that this supercycle of updates will find its customers. Multi-device iCloud storage integration and cross-hardware system dependencies function as an economic exit barrier against platform switching.
With Apple increasing iPhone prices, many consumers will take this opportunity to consider competing smartphones. Those who do will quickly realise that a move from iOS to any Android phone requires significant work.
Personal data, such as photo archives, data backups and apps and games purchased through the Apple Store, do not leave their secure iOS containers with a snap of the fingers. Apple’s velvet garden around your information creates significant inertia for those considering moving platforms.
It’s expected that iPhone owners will also use Apple’s own peripherals, such as the Apple Watch and AirPods, which do not offer complete cross platform support on Android. The financial investment in peripherals is just as strong as the investment in personal data.
In light of these moves, the $200 surcharge feels like a relatively small ongoing cost to receive the biggest software update to the iPhone in years. Coordinated price increases across iPad and MacBook lines establish a premium cost baseline ahead of high-volume seasonal product launches. The iPhone 18 Pro price increase is not happening in a vacuum.
Outgoing Apple CEO Tim Cook has already announced that price hikes are unavoidable. Indeed, prices have already been increased on several iPad Air, iPad Pro, and MacBook models to counter the increased cost of silicon.
This will diminish the backlash toward incoming CEO John Ternus and prepare the community for some sticker shock in September. The normalisation of price rises across Apple’s secondary devices sets the tone for the September launch event. Samsung has already raised prices on last year’s Galaxy Z Fold7 phones by $80.
It’s likely that the summer launches of Samsung’s Galaxy Z Fold8 and Google’s Pixel 11 Pro will also show higher year-on-year pricing. By the time the iPhone 18 Pro is revealed, the $200 premium will no longer feel predatory— instead, consumers will regard it as a uniform response across the industry to prevailing market conditions.
