When market distortions become so extreme that the underlying economics stop making sense, retreat is the only recourse. And, this is exactly what Morgan Stanley is now betting on in relation to Apple's ongoing bid for uncontested market share supremacy via a combination of price freezes and strategic hoarding of memory resources.
Morgan Stanley believes Apple will not be able to sell the upcoming iPhone 18 variants at the same prices as those of their equivalent iPhone 17 counterparts
Apple's emergent strategy to freeze the prices of its products amid the ongoing memory-driven turmoil first became evident when it refused to hike the prices of its MacBooks even as Microsoft embarked on a bruising inflationary spiral for its Surface laptops.
Following these ill-timed price hikes, Apple's comparative Mac-related price advantage has only become more entrenched. For instance, the 12-inch Surface Pro now starts at $1,049, while the 13-inch M4 MacBook Air from Apple starts at $999. For context, this base Surface variant previously retailed for just $799.
At the other end of the spectrum, the 15-inch Surface laptop with 64GB of RAM, the Snapdragon X Elite SoC, and a 1TB SSD now costs $3,649. For comparison, the 16-inch M5 Pro MacBook Pro from Apple with equal RAM and SSD starts at $3,299.
Apple's implied strategy of a price freeze received another boost just last week when the Cupertino-based tech giant decided to discontinue the base 256GB storage variant of the M4 Mac mini rather than hiking its price.
Even so, this strategy is now running headlong into deteriorating economic realities. For instance, at its latest earnings call, Apple conceded that it expects a "substantial" increase in memory costs in the June quarter, and that it would resort to a number of strategies - which presumably includes price hikes - to manage the ensuing impact on its margins.
It is hardly a surprise, therefore, that Morgan Stanley's Erik Woodring now expects Apple to raise the prices of the upcoming iPhone 18 variants by $100 over their iPhone 17 counterparts.
Do note that the given magnitude of price hikes won't fundamentally alter Apple's competitive advantage, especially in this market. After all, Apple's competitors are hiking prices even more aggressively, with some Chinese OEMs reportedly facing Bill of Materials (BOM) as high as $917 for their Ultra-class flagships.
What's more, Samsung has been increasing the prices of its Galaxy S-series for years without offering a meaningful upgrade as compensation.
Even so, Apple's dreams of demonstrating its unparalleled heft and synchronous command of the supply chain by eschewing price hikes appear to have finally hit an uncompromising wall of memory-led cost inflation.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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