Apple's bold play: absorbing costs to grab iphone market share

Published on 11/03/2026 21:22 in business • Michael Johnson

Smartphone price hikes were widely anticipated amid memory chip shortages. But while the industry braces for cost increases, Apple appears to be navigating the situation with a surprising strategy: absorbing those costs, at least for now.

Apple

Apple's strategy: buying time and market share

Analyst Ming-chi Kuo suggests Apple is leveraging its immense buying power to secure stable memory module supplies and absorb inflated prices. The recently launched MacBook Neo and the upcoming iPhone 17e exemplify this approach, maintaining prices comparable to last year's models while offering more storage. This isn't a novel tactic for Apple, but its scale is noteworthy.

The impact is evident in Apple’s dealings with suppliers like Samsung. Reports indicate Apple accepted significantly higher prices for memory modules from Samsung without negotiation, a stark contrast to the industry’s current bargaining power dynamics. Kuo believes Apple anticipates these shortages could persist for several years, making price increases a long-term strategy they want to avoid.

The move could prove effective. The price increases seen with the new Samsung Galaxy S26 phones suggest a potential shift in the market. If Apple can absorb these costs, it could entice a significant number of consumers to switch, particularly given the compelling value proposition of devices like the MacBook Neo.

However, the question remains whether this strategy can be sustained. While Apple may gain market share, it’s a delicate balancing act. The company's financial flexibility will be tested as it absorbs these rising expenses. The iPhone 17e maintaining the same price as the iPhone 16e, despite increased component costs, is a testament to Apple's strategic maneuvering. It’s a calculated gamble that could reshape the competitive landscape.

This isn't simply about avoiding price hikes; it's about consolidating market position. Apple is betting that consumers will prioritize the brand and ecosystem over marginal price differences, a strategy that has served them well in the past.