Why iPhone 17 prices jumped the same day Apple launched the iPhone 18

Apple has turned one of the most predictable rules of the iPhone business on its head. When a new iPhone arrives, older models usually get cheaper.This year, Apple did the opposite.As it unveiled the iPhone 18 Pro, iPhone 18 Pro Max and its first foldable, the iPhone Duo, it also raised the prices of several older iPhones in India.The iPhone 17 is now Rs 99,900, up Rs 17,000 from Rs 82,900. The iPhone 16 has risen by Rs 20,000, while the iPhone 17e is Rs 15,000 more expensive. The iPhone Air has seen the biggest increase, jumping Rs 30,000 to Rs 1,49,900. That is a remarkable move for a company that has historically used older iPhones as its more affordable options when a new generation arrives.So why did Apple make its older iPhones more expensive just as it launched new ones? The answer is buried inside the phones: memory chips are getting much more expensive, and the AI boom is partly to blame.THE CHIPFLATION EFFECT“Chipflation” is essentially inflation caused by rising semiconductor prices. And right now, memory is at the centre of the squeeze.DRAM and NAND chips are essential components in smartphones, laptops and other consumer electronics. But they are also critical to the enormous data centres being built to power generative AI.AI companies and cloud providers are consuming huge amounts of memory, creating a new source of demand for components that smartphone makers have relied on for years.That is putting pressure on supply — and pushing up prices.TrendForce estimated in August that the bill of materials for a 256GB iPhone 18 Pro could rise by around 38% year-on-year, largely because of higher memory costs. Memory's share of the phone's total bill of materials was estimated to have climbed from around 10% a year earlier to about 34% in the third quarter of 2026.In other words, a component that once represented a relatively small part of a smartphone’s manufacturing cost has suddenly become one of its biggest cost pressures.AI IS MAKING PHONES COSTLIERThere is an odd twist to the story.The AI boom is making technology more expensive not just because AI products cost money, but because building AI requires enormous amounts of hardware.Cloud providers are filling data centres with processors, high-bandwidth memory and conventional memory. Memory manufacturers, meanwhile, have strong incentives to prioritise higher-value products used in AI infrastructure.That leaves consumer electronics companies competing for a tighter supply of memory.And unlike demand for a new smartphone, this supply cannot be switched on overnight. Building new semiconductor manufacturing capacity takes years.The result is a classic supply squeeze: more demand, limited near-term supply and higher component prices.Eventually, those higher costs have to show up somewhere — in manufacturers’ margins, in product specifications or, as Apple is now demonstrating, in the price consumers pay.APPLE SAW THIS COMINGApple had already given investors and consumers a warning that rising component costs were becoming harder to absorb.In a June interview with the Wall Street Journal, then-CEO Tim Cook said price increases had become unavoidable amid soaring memory and storage costs driven by demand from AI data centres.Apple subsequently raised prices on several Mac and iPad models, including the MacBook Neo, MacBook Air, MacBook Pro and iPad models.That made an iPhone price increase increasingly likely.The September launch gave Apple a natural moment to reset prices across its existing lineup — and it has used it to do so aggressively.THE INDIA PRICE SHOCKThe increases are significant enough to change the economics of buying an older iPhone.The iPhone Air has taken the biggest hit in absolute terms, with a Rs 30,000 increase.But the iPhone 17 hike may be the more consequential one. At Rs 99,900, Apple’s standard iPhone is now sitting much closer to the premium end of the market.And that changes the role older iPhones traditionally play in Apple’s lineup. Instead of becoming cheaper alternatives to the latest models, they are now being repositioned at significantly higher prices.AND THEN THERE'S THE IPHONE 18There is another unusual wrinkle to Apple’s strategy this year: the standard iPhone 18 is not here yet.Apple has launched the iPhone 18 Pro and iPhone 18 Pro Max, alongside the iPhone Duo, but the standard iPhone 18 is expected to arrive later, with reports pointing to a spring 2027 launch window.That effectively splits Apple’s usual annual iPhone cycle into two.The premium models and the foldable arrive ahead of the crucial year-end shopping season, while the standard iPhone 18 and other mainstream models can follow later.That also gives Apple more room to manage the pricing and positioning of its existing phones in the meantime.Apple’s move may ultimately be about more than this year’s iPhones.For years, falling component costs and improving manufacturing efficiencies helped consumer electronics become more capable without becoming dramatically more expensive.AI is now disrupting that equation.The same technology boom driving demand for data centres is competing for some of the components inside everyday devices. If memory prices remain elevated, smartphones, PCs and other electronics could face a period where prices rise even as manufacturers continue to make them more powerful.For consumers, that could mean the old upgrade equation is changing.A new iPhone may be more expensive. But, for the first time, even the old one may not be getting cheaper.- EndsPublished On: Sep 10, 2026 10:28 IST