iPhone 18 Pro Parts Cost Set to Rise Nearly 40%, Report Says
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Taiwanese research firm TrendForce has forecast that the bill of materials (BOM) cost for Apple's upcoming iPhone 18 Pro will surge by nearly 40%, a sharp increase that could squeeze the company's profitability.
The BOM refers to the total cost of all components required to assemble a device, and a rise of this size would mark a significant jump for Apple's flagship line.
According to the report, Apple is expected to absorb some of this added cost itself rather than pass it fully onto consumers, effectively sacrificing margins in order to sustain shipment volumes.
This approach would allow Apple to keep production and sales steady even as component costs climb, though it would likely reduce per-unit profitability.
TrendForce's report also notes that the iPhone 18 Pro is set to include three new camera upgrades, although specific technical details were not disclosed.
Separately, the report addresses recent market speculation concerning chip supplier TSMC.
Rumors had suggested that TSMC was holding roughly $1 billion in unfulfilled orders for Apple processors, chips that serve as the core computing component in Apple devices.
Well-known analyst Guo Ming-qi pushed back against this claim, stating that the situation does not reflect a passive buildup or a slowdown in demand.
Instead, he described it as a normal part of the production ramp-up process that occurs ahead of a major product launch.
In such cases, manufacturers typically increase inventory gradually to ensure enough components are ready once full-scale production begins.
Guo's comments appear intended to calm concerns that Apple may be scaling back its chip orders or facing weaker-than-expected demand for upcoming devices.
TrendForce did not provide additional specifics on pricing, release timing, or how the higher component costs might ultimately affect retail prices for the iPhone 18 Pro.
The report underscores the broader industry trend of rising component costs, particularly for advanced camera systems and processors, as manufacturers push for improved performance in flagship smartphones.
Vocabulary7 words
- bill of materials
- a full list of parts and their cost
- BOM
- short name for bill of materials
- margins
- the profit left after costs are paid
- shipment
- amount of product sent to be sold
- processors
- main chips that run a device
- ramp-up
- slow increase in making a product
- inventory
- goods stored before being sold
Quiz
Answer key
1. They will rise by nearly 40% 2. By accepting lower margins to maintain shipment volumes 3. As a normal part of production ramp-up before launch
Discussion questions
- Why might a company choose to lower its profit margins instead of raising prices?
- How could rising component costs affect the smartphone industry as a whole?
- Why do companies build up inventory before launching a new product?
- Do you think rumors like the TSMC backlog story can affect how investors see a company? Why or why not?