Soaring Expenses: Potential Increase in iPhone Prices by 2026

According to market intelligence company Counterpoint Research, Apple is expected to experience a 2.2% year-on-year decline in iPhone sales next year. This decline is attributed to substantially higher manufacturing costs, which will result in higher prices for consumers.

The overall global smartphone shipments are projected to decrease by 2.1% in 2026 due to the impact of rapidly rising component costs on smartphone demand. Counterpoint Research’s Global Smartphone Shipment Tracker and Forecast indicates that Apple will see a more significant drop in iPhone sales compared to its competitors, although this is not likely to have a major impact on its overall revenue.

Counterpoint analysts predict a 2.2% year-on-year decrease in iPhone sales for Apple, surpassing the decline expected for other smartphone manufacturers such as Mi, Oppo, Samsung, and Vivo. The research firm anticipates higher manufacturing expenses in the upcoming year, primarily driven by the rising costs of components, especially memory.

As a result, Counterpoint forecasts a 6.9% increase in the average selling price of smartphones in the next year as companies, including Apple, pass on these higher costs to consumers. This marks a significant jump from the previous forecast of 3.9% released in September 2025.

Research Director MS Hwang notes that the low-end smartphone market (below $200) is expected to be the most affected, with bill of materials costs increasing by 20%-30% since the beginning of the year. Mid- and high-end segments are also likely to see price hikes of 10%-15%.

While all smartphone manufacturers will face rising component costs, lower-end smartphone vendors may find it particularly challenging. These companies might reduce entry-level models, reuse older components, or raise prices to sustain their business, potentially impacting smartphone sales, especially in the lower-end Android handset segment.

Counterpoint Research highlights that memory prices could surge by another 40% through Q2 2026, leading to costs that are 8%-15% higher than current levels. Despite this, Apple and Samsung are expected to navigate these price increases more smoothly due to their healthy profit margins and long-term supply agreements that mitigate exposure to volatile component prices.

Senior Analyst Yang Wang mentions that Apple and Samsung are better positioned to withstand these challenges compared to other OEMs, especially Chinese manufacturers facing tight profit margins. Honor and Vivo, lower-end Android phone makers, are likely to be most impacted by the increased costs.

While Apple’s higher pricing strategy allows for better absorption of cost increases, smaller companies may struggle. This could lead to adjustments such as smaller memory configurations, lower camera and display specifications, and potential consolidation of product lineups.

Wang emphasizes that steep price increases in the lower price bands are unsustainable for smartphones. If cost pass-through is not feasible, OEMs may need to streamline their product portfolios, as evidenced by reduced volumes of low-end SKUs in the market.