.png){kind=logo}
Apple continues to make substantial margins from iPhone storage upgrades despite rising memory chip prices. A new analysis by The Wall Street Journal suggests the company charges customers more than three times its estimated cost for additional storage on the iPhone 18 Pro.
The report highlighted how Apple's storage pricing has changed as demand from artificial intelligence companies pushes up the cost of flash memory. Although Apple's expenses have increased sharply, the company continues to earn significant amounts from customers who choose higher storage configurations.
According to the WSJ analysis, upgrading the iPhone 18 Pro from 256GB to 1TB costs customers an additional USD 600. Apple's estimated cost for the extra storage is around USD 192. This means the company charges slightly more than three times its estimated component cost. The figures are based on storage prices and supplier cost estimates, rather than financial details disclosed directly by Apple.
The comparison with last year's iPhone 17 Pro is particularly notable. Customers paid USD 400 to move from 256GB to 1TB, while Apple's estimated cost was just USD 42. That represented a much higher markup than the latest model.
Also Read: Apple’s iPhone Duo Costs as Much as a High-end Motorcycle: Prices Compared
The increase in storage costs is linked to growing demand from AI data centers. Technology companies are purchasing large volumes of flash memory, giving suppliers greater bargaining power.
The WSJ estimates that Apple's flash storage spending could rise from USD 6 billion in 2025 to USD 25 billion in 2026. Apple has also acknowledged the pressure. During its latest earnings discussion, the company warned that higher memory costs would affect its holiday-quarter profit margins.
Also Read: Apple Price Hikes May Drive Stronger Demand for Refurbished iPhones in India
Apple's storage pricing remains expensive even as component costs rise. Buyers must now consider whether paying hundreds of dollars for additional built-in storage makes sense compared with using cloud storage services. For Apple, the challenge is balancing higher supplier costs with customer demand while protecting its traditionally strong hardware margins.