Opting for more RAM or storage when buying Apple devices has always been an expensive business, with the company famously charging huge markups.
Apple said in its most recent earnings report that even after the price increases, its margins are being squeezed by higher component costs. But an analysis suggests that the company is still charging three times its own costs for higher storage tiers on the iPhone 18 Pro …
To be fair to Apple, some of the criticism about the premiums charged on configuring a device with more memory or flash storage hasn’t been comparing, well, apples with apples. The SSDs used in Macs, for example, are very much faster than the lower-spec third-party storage cards people typically cite as evidence for the company’s greed.
All the same, there’s no denying that the iPhone maker has always applied extremely high markups to its own direct costs. With the iPhone 17 Pro, for example, upgrading from 256GB to 1TB cost a buyer $400. A Wall Street Journal analysis cited by Macworld says that Apple’s cost at the time was $42, almost a 1,000% markup.
Apple this week warned that memory costs will reduce its holiday quarter profit margins.
When you remove the tariff refunds from both the June and September quarters, both company and product gross margin would be down about one point sequentially, primarily driven by higher memory costs. Parekh added that the pressure on Apple’s margins isn’t expected to ease anytime soon.
However, the WSJ’s number-crunching suggests that we probably don’t need to get out the violins just yet. The paper compared the same upgrade on the iPhone 18 Pro, where Apple has increased the price difference to $600. Although the Cupertino company is paying dramatically more, with an estimated direct cost of $192, that still amounts to customers being charged more than three times the price paid by Apple.
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