GF Securities' Jeff Pu downgraded Apple to Hold, citing $200-$300 iPhone 18 Pro price hikes from rising memory and silicon costs. Tim Cook called it a '100-year flood' on memory.
GF Securities analyst Jeff Pu downgraded Apple to “Hold” after the company’s quarterly guidance signaled big price increases for the iPhone 18 Pro series. Pu expects the iPhone 18 Pro and iPhone 18 Pro Max to cost $200 to $300 more when they launch in September, driven by rising costs for TSMC silicon wafers and inflationary pressure on NAND and DRAM memory.
Apple CEO Tim Cook confirmed the pressure during this week’s Q3 earnings call. He described the memory pricing environment as “what I would characterize as a 100-year flood on memory pricing with exponential increases in memory prices.” Cook said silicon costs will be higher in the September quarter, only partially offset by lower component costs and Apple’s inventory stockpile. He would not comment on future product pricing, but the iPhone 18 Pro line will be affected.
The memory cost surge is not limited to Apple. Demand for AI server infrastructure has tightened supply across the memory and storage market. Samsung’s Galaxy Z Fold8 and Z Fold8 Ultra saw year-on-year price increases of $100 to $200 depending on the model. Xiaomi raised prices across its portfolio. Oppo, OnePlus, and Vivo announced price increases in the second quarter of 2026.
Qualcomm CEO Christiano Amon said the price hikes are shifting consumer behavior. “Consumer preference within the premium category is changing towards a preference to the lower end of the premium, as well to last year’s phone, because of the memory price increases,” he said.
Pu sees two challenges for Apple’s primary growth driver. The first is the higher bill of materials. “Higher 2nm silicon and DRAM/NAND costs could drive a $250–300 price hike for iPhone 18 Pro,” he wrote. The second is the iterative nature of the upgrade from the iPhone 16 Pro and iPhone 17 Pro, which limits the incentive to buy new. The foldable iPhone Ultra could add up to seven million units in sales, but Pu is cautious on iPhone 18 Pro demand.
Writing in Bloomberg’s Power On newsletter, Mark Gurman said the question is not whether iPhone prices will rise, but by how much. Given the recent $100 to $200 increases on the iPad and Mac, Gurman expects a similar range for the iPhone. He also said Apple’s new Upgrade leasing program, launched this week, is designed to soften the sticker shock. “Expect Apple to lean more towards $35 per month for two years rather than $1299 to buy the iPhone 18 Pro outright,” he wrote. Gurman added that the foldable iPhone will start at $2,000, if not more, noting that Samsung’s new foldable is $1,900 and Apple will pitch its device as more premium.
Apple’s hardware margins are under systemic pressure from memory and silicon costs that show no signs of easing. The iPhone 18 Pro will introduce new AI features, but the combination of higher prices and incremental hardware changes may test consumer willingness to upgrade.
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