Apple is squeezing suppliers to keep the next generation of iPhones from getting more expensive, even as the cost of memory chips continues to climb. The company’s aggressive cost-cutting measures come at a time when inflation in semiconductor prices has forced other tech manufacturers to raise device prices, leaving Apple in a precarious position. While the iPhone has historically maintained its premium pricing, the rising cost of components—particularly memory—threatens to disrupt that stability. Apple’s strategy hinges on shifting financial pressure onto its suppliers rather than absorbing the costs itself or passing them directly to consumers.
Pressure on display makers to cut costs
According to supply-chain sources, the company has demanded lower prices for the OLED panels that will be used in the iPhone 18 series. For the iPhone 18 Pro Max, Apple initially pushed Samsung Display and LG Display to accept $70 per panel—down from over $100 for the iPhone 16 Pro Max and $80 for the 17 Pro Max. Negotiations have since driven the price even lower, to around $66.50. This reduction is particularly notable given that Apple’s display partners have already absorbed multiple rounds of price cuts in recent years, with each new iPhone generation bringing tighter margins.
This year’s screens are more complex to produce. The new OLEDs incorporate M16 stacks, improving brightness, color reproduction, power efficiency, and lifespan, but this means manufacturers have to adjust the production process and stabilize yields. “While product specifications and production difficulty have increased, the price has effectively decreased,” the source explains.
Samsung Display president Lee Chung called the situation “very difficult due to ‘chipflation,'” noting “significant pressure to lower prices for components and displays.” LG Display president Jeong Chul-dong was slightly more upbeat, saying the pressure was “at a level we can endure as we are pursuing cost innovation.”
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The question now is whether these savings will translate into lower prices for consumers or simply pad Apple’s profit margins. The iPhone 18 Pro and 18 Pro Max will go on sale this September, and official pricing won’t be announced until then.
Why the price cuts matter
Apple’s ability to strong-arm suppliers isn’t new, but the scale of these reductions stands out. Memory prices have been rising for months, driven by a combination of strong demand from AI and data center applications, as well as supply constraints in the DRAM and NAND flash markets. Without these display price cuts, the iPhone’s bill of materials would have climbed even higher, potentially forcing Apple to choose between eroding its margins or raising retail prices. For consumers, this could mean the difference between a modest price hike or no increase at all. The stakes are particularly high for Apple, as the iPhone remains its most profitable product line, accounting for more than half of its total revenue in recent quarters.
Still, the push isn’t without risk. Suppliers already operating on thin margins may struggle to invest in future improvements if Apple keeps demanding steeper discounts. Display manufacturers like Samsung and LG rely on high-volume contracts with Apple to fund research and development for next-generation technologies. If their profits shrink further, they may be forced to delay or scale back these projects, which could limit the innovation available to Apple in future iPhone models.
For now, the display makers are playing along. Both Samsung and LG have long-standing relationships with Apple and are reluctant to jeopardize their position as key suppliers. However, if memory costs keep rising, Apple may have to choose between accepting smaller margins or passing the cost to customers after all. The company has already demonstrated its willingness to absorb some financial pain, as seen in its recent iPad and Mac price hikes, but the iPhone is a different beast. Any significant increase in its price could dampen demand, particularly in competitive markets like China, where local brands offer high-spec alternatives at lower prices.
