Key Factors
- Apple plans to maintain iPhone 18 costs regular regardless of hovering reminiscence prices impacting margins.
- Apple leverages supply-chain power, aiming to soak up margin ache relatively than improve costs.
- iPhone 18 premium fashions might launch fall 2026, base variations probably delayed till spring 2027.
Apple (AAPL) is outwardly choosing margin ache as an alternative of sticker shock.
Reminiscence costs proceed to spike resulting from relentless AI knowledge middle demand, however Apple’s seeking to sidestep elevating iPhone costs, even when it means taking a bottom-line hit.
Analyst Ming-Chi Kuo, who’s a veteran in masking Apple’s provide chain for a number of years, says the tech large will follow their strategy when it launches the hotly anticipated iPhone 18, not less than for now.
That pivotal choice places Apple’s supply-chain power below the scanner because it heads into earnings on Thursday, January 29, 2026 (after the market closes).
Having coated the reminiscence area extensively over the previous few months, it’s crystal clear that suppliers have a ton of leverage for the foreseeable future.
Bellwethers within the area, like Micron, are constructing mammoth fabs to ease provide constraints, however most of these efforts are long-term, pointing to potential bother over the following couple of years not less than.
Naturally, most {hardware} firms have little selection however to hike costs, however Apple isn’t your common {hardware} firm.
Apple can take the hits and is way extra insulated than some other {hardware} firm in historical past, which may doubtlessly change into its largest power amidst the reminiscence crunch.
Apple’s iPhone playbook faces uncommon stress take a look at
In accordance with TF Worldwide Securities analyst Ming-Chi Kuo, Apple is seeking to take it on the chin with the upper reminiscence prices as an alternative of risking the iPhone pricing boat.
Extra Tech Shares:
Kuo’s learn is that Apple senses a chance in one which successfully performs to its scale and great supply-chain muscle.
In a put up on X, Kuo acknowledged that greater reminiscence prices will hit iPhone gross margins. Nonetheless, we went on to say that,
However Apple’s playbook is obvious: use the market chaos to their benefit—safe the chips, soak up the prices, and seize extra market share. They’ll make it again in a while the providers aspect.
Kuo boils Apple’s considering down to 3 key strikes.
- Soak up the ache now: Reminiscence costs are rising at an unbelievable tempo, and Apple is choosing margin stress as an alternative of client backlash.
- Lockdown provide: Apple’s scale allows it to successfully safe elements that others can’t, even because the shortages develop worse.
- Play the lengthy sport: Any near-term margin hit can be seen as short-term, with providers income prone to backfill over time.
Nonetheless, there’s a big threat that these pressures aren’t contained, as Kuo notes that iPhone reminiscence costs are nonetheless being renegotiated quarterly relatively than on a semiannual foundation.
For now, he feels that “the 2Q26 QoQ increase looks similar to 1Q26.”
Therefore, that dynamic makes Apple’s upcoming earnings commentary doubly essential, as what it says about reminiscence, provide, and price pressures may ripple past the corporate itself.
Apple studies Q1 2026 earnings tomorrow
Apple will report its holiday-quarter earnings tomorrow, watching a well-recognized mixture of progress and stress factors.
iPhone gross sales are anticipated to ship their healthiest year-over-year acquire in over 4 years, led by premium Professional demand and a rebound in China.
Providers will proceed to do the heavy lifting on the underside line, even with the regulatory roadblocks in Europe. Maybe the larger wildcard is margin stress from the skyrocketing reminiscence prices, which Apple is keen to soak up.
Looming over all of it is AI, with additional developments on the Siri entrance after Apple’s tie-up with Google’s Gemini.
Apple’s final quarter (This fall 2025) by the numbers
- Complete internet gross sales: $102.47 billion, up about 8% year-over-year (vs. $94.93 billion), beating consensus expectations of roughly $102.1 billion.
- EPS (diluted): $1.85, in contrast with $0.97 a 12 months earlier (the prior-year determine was impacted by a one-time tax cost), and forward of consensus estimates close to $1.77.
- Gross margin ({dollars}): $48.34 billion, up from $43.9 billion within the prior-year quarter, reflecting sturdy working leverage regardless of price pressures.
- Web earnings: $27.46 billion, practically doubling from $14.74 billion a 12 months earlier, underscoring the earnings energy of Apple’s combine and scale.
The iPhone 17 collection has been an outlier for Apple, and the analysts agree.
In accordance with IDC knowledge cited by Reuters, Apple is forecasted to ship practically 247 million iPhones in 2025, up 6% year-over-year, pushed by excellent demand, notably in China.
Financial institution of America is anticipating a robust December quarter for Apple, and within the earnings preview I coated, it raised its estimate of iPhone unit gross sales for the quarter to 85 million, projecting 17% year-over-year progress.
On prime of that, BofA’s modelling 13% year-over-year providers progress, a outstanding displaying given the softness in China’s App Retailer developments.
iPhone 18: launch window, anticipated fashions, and what occurs to pricing
In accordance with latest studies, Apple’s iPhone 18 cycle may not be the same old single September “all-at-once” reveal.
Bloomberg’s Mark Gurman means that Apple could be to prioritize its premium iPhone 18 fashions in fall 2026 (probably September), after which push again the bottom iPhone 18 mannequin and a less expensive “18e” into spring 2027 (round March).
That spreads issues out for Apple, and with menu skewing costly early, that would carry Apple’s efficient pricing even when sticker costs don’t transfer issues.
iPhone 18 lineup (based mostly on present studies/rumors)
Fall 2026 (premium wave):
- iPhone 18 Professional.
- iPhone 18 Professional Max.
- The primary foldable iPhone is being mentioned as a part of the premium wave forecasted to be $2,000 to $2,500.
Spring 2027 (mass-market wave):
- iPhone 18 (base).
- iPhone 18e (mid-range).
- A model new “Air” mannequin can be being reported.
Apple has reset the pricing ladder with iPhone 17, resetting the pricing ladder with the newest mannequin by successfully pairing it with greater base storage with acquainted headline charges:
- iPhone 17: marketed from $799; Apple lists $829 in case you “connect on your own later” (256GB).
- iPhone Air: from $999 (256GB).
- iPhone 17 Professional: from $1,099.
- iPhone 17 Professional Max: Apple reveals $1,199 for 256GB (and $1,399 for 512GB).
Concerning the writer
Moz (Muslim) Farooque is a monetary journalist, U.S. inventory and crypto analyst, and founding editor at Undervalued Deep Insights.He makes a speciality of deep dives on AI & rising tech, electric-vehicle disruptors, big-tech giants, blockchain & crypto markets, and leisure & media shares.
