Apple could see the cost of memory in its smartphones surge dramatically by 2027, according to a JPMorgan analysis cited by the Financial Times. Right now, memory accounts for roughly 10% of the component cost in an iPhone, but that share might hit 45% within a few years.
The company buys memory for around 250 million devices annually and has long been one of the market's biggest customers. But the dynamics have shifted. Apple now has to compete with other major players for limited supply from manufacturers like Samsung, SK Hynix, and Micron.
The main driver behind rising prices is the rapid expansion of AI infrastructure. Companies building data centers for artificial intelligence—including NVIDIA and major cloud operators—are snapping up large quantities of memory, often offering better terms and multi-billion-dollar prepayments. This is reshaping the market: instead of traditional long-term contracts with set volumes, memory makers increasingly get upfront payments and allocate capacity to the most lucrative clients.
The pressure is already influencing Apple's smartphone plans. Sources say the launch of the iPhone 18 could be staggered, with pricier models arriving in fall 2027 and more affordable versions following in spring. A foldable iPhone might launch at the same time.
Organizational changes are also underway inside Apple. Hardware chief John Ternus is poised to succeed Tim Cook as CEO, while Cook may take on the role of executive chairman. One of the first big decisions for the new leadership will be whether to absorb the rising costs or pass them on to buyers.
Analysts say the outcome will hinge on Apple's strategy to hold onto market share, especially in competitive regions like China and India. In one scenario, Apple might choose not to raise prices sharply in order to keep its position, even if that means thinner profit margins.