AirPods 5 Beat the Inflation Tax While iPhones Get Pricier
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We all knew it was coming. The writing was on the wall in June, when the RAMpocalypse forced Apple to hike prices to unprecedented levels for most of its products. It was pretty clear that an iPhone price increase wouldn’t be far behind.
With Apple’s iPhone 18 Pro and iPhone 18 Pro Max expected to launch in the fall, it seemed we were just in for a waiting game. After all, not only did it make sense for Apple to slip in those price increases with new hardware, but it also gave Apple the opportunity for one last burst in sales to clear out old stock — especially for the iPhone 17 Pro models, which everyone knew would soon be discontinued.
So, it wasn’t a big surprise when the iPhone 18 Pro and iPhone 18 Pro Max launched with higher price tags this week. Still, there was a silver lining: those price increases were lower than what many analysts had predicted. While some of the worst-case scenarios were anticipating $400 hikes based on Apple’s bill of materials, the most optimistic estimates suggested something in the $150–$200 range. Of course, everyone acknowledged that Apple could choose to eat some of those costs — and it appears that’s exactly what the company did.
By most accounts, Apple has been sharpening its pencil for years to keep its products — especially the iPhone — at fixed price points. There’s every indication it hated having to hike prices this year, but as former CEO Tim Cook told The Wall Street Journal in June, “This is a hundred-year flood.” Desperate times call for desperate measures.
For the iPhone 18 Pro models, Apple was able to push costs down in other areas such as the OLED panels, where it still has the kind of supply chain leverage it no longer enjoys in the RAM and flash storage business. The result is that the iPhone 18 Pro and iPhone 18 Pro Max each increased by only $100 over their iPhone 17 Pro predecessors — at least for the base storage prices.
That means the iPhone 18 Pro now starts at $1,199 for 256 GB of storage, while the same capacity on an iPhone 18 Pro Max will set you back $1,299. That’s still a far cry from the lovely $999 price point of the iPhone 16 Pro two years ago, but technically speaking it’s the first actual price hike in years.
Last year, Apple raised the floor with the iPhone 17 Pro by eliminating the entry-level 128 GB tier, making the $1,099 256 GB model the baseline. That means you had to pay $100 more to get into the iPhone 17 Pro family, but you were still paying the same $1,099 for 256 GB that had been the norm since the iPhone 12 Pro in 2020. In other words, you weren’t paying any more if you were going to opt for the 256 GB model anyway (and, let’s face it, that’s the sweet spot, as 128 GB is ridiculously tight these days, especially for a Pro model).
This year, that all changes. The iPhone 18 Pro still starts at 256 GB, but the price has now gone up for the first time in six years. In fact, it actually rises above the price of the equivalent iPhone X, iPhone XS, and iPhone 11 Pro models, which initially launched for $1,149 for the 256 GB version (back when the base $999 option only included 64 GB of storage).
Sadly, the gap increases as you move up to higher storage tiers, making it abundantly obvious that this is entirely about rising flash storage prices. While you’ll pay $100 more for the 256 GB model, the 1 TB iPhone 18 Pro goes up to $1,799 — a $300 increase over the $1,499 iPhone 17 Pro. The 2 TB model gets even pricier at $2,399; that’s a new option for the smaller iPhone 18 Pro, but at $2,499, it’s a $500 increase for the iPhone 18 Pro Max.
Of course, while nobody wants to see prices going up these days, it seems like it had to happen eventually, and at least there’s arguably some good value here. Sure, component and memory costs have traditionally decreased — at least in the years before the current AI craze drove them into the stratosphere — but at the same time Apple has managed to pack in substantial new features into each year’s iPhone Pro models. The iPhone 17 Pro is a substantial upgrade over the iPhone 12 Pro that sold for the same price in 2020. Does knowing that take some of the sting out of it? We’re not sure, but at least it’s a nice “glass-half-full” way to look at it.
The iPhone 17 Lineup Rises with the Tide
Unfortunately, the same can’t be said for the rest of the iPhone lineup. While the iPhone 18 Pro gets a price increase that could be seen as commensurate with new features like the A20 Pro and variable aperture camera system, the iPhone 16, iPhone 17, iPhone 17e, and iPhone Air are still sitting in the lineup as the exact same iPhone models they were four days ago — but with an extra $100 tacked onto each of their price tags:
- iPhone 17e: $699
- iPhone 16: $799
- iPhone 17: $899
- iPhone Air: $1,099
That puts us a long way from the days when Apple’s “budget” iPhone could be had for under $500. Granted, today’s iPhone 17e starts at 256 GB of storage, making it roughly equivalent to the $579 iPhone SE in 2020, but lots of folks looking for an affordable iPhone don’t really need that capacity, and the iPhone SE sold for $429 for 64 GB or $479 for 128 GB back in the day. The iPhone 16e already raised that bar to $599 (for 128 GB), although it delivered a lot more for that price, but seeing this go up to $699 totally short-circuits the idea of what a “budget” iPhone should be.
There are also indications these price hikes are hitting Apple’s Certified Refurbished Store, although refurb stock levels are so scarce right now that it’s hard to tell yet what the impact will be.
The Apple Watch was (Mostly) Spared
Between June’s big price hikes and this week’s iPhone “adjustments,” Apple has now raised the prices of nearly everything it sells. However, the Apple Watch appears to have emerged mostly unscathed.
Perhaps that’s because Apple’s wearable doesn’t use much in the way of memory — the Apple Watch Series 12 and Ultra 4 still pack in only 64 GB of storage, and while the new S11 chip appears to have doubled the RAM over its predecessor, we’re still only talking about 4 GB. These are presumably costs Apple decided it could afford to eat.
The Apple Watch Series 12 and Apple Watch Ultra 4 have retained the same starting prices — $399 and $799, respectively — as their predecessors. That said, Apple has snuck in a small price hike that’s easy to miss: while the smaller 42 mm Apple Watch Series 12 starts at $399, the 46 mm model has snuck up by $20, now landing at $449. That increases the gap between the two sizes from the traditional $30 to $50.
Twenty bucks isn’t likely to be a deal-breaker for most folks, but it goes to show that Apple is likely running on razor-thin margins here. The 46 mm model is also the more popular size — the larger sizes have historically sold better than the smaller ones across all generations from the very first Apple Watch in 2015. That lets Apple keep its nice $399 starting price for marketing purposes, while making up for that in the volume of 46 mm sales. Most people buy Apple Watch sizes based on fit, not price, so that higher $50 difference isn’t likely going to be enough to push most people to the smaller model.
The AirPods 5 Defy the Odds
The other major product category that escaped price increases in June was Apple’s AirPods. Nobody ever really expected those to get a price hike — they basically don’t use any meaningful amounts of RAM or storage, so they’re somewhat immune to those market forces.
Still, Apple managed to pleasantly surprise us with this year’s AirPods 5, which deliver substantially more value than their predecessors at the same base price and a lower upgrade price.
When Apple unveiled the AirPods 4 two years ago, they were the first of its standard AirPods to feature active noise cancellation. However, getting ANC required paying a $50 premium; the base AirPods 4 sold for $129, while the “AirPods 4 with ANC” (literally the name Apple used), sold for $179. In addition to adding ANC, the higher-end models also included a case with wireless charging support.
The AirPods 5 have upended that business model by bringing ANC to the base AirPods. In other words, for $129 you’re getting the most valuable feature of the $179 AirPods 4. You’ll still need to opt for a higher tier to get the wireless charging case, but that package now sells for $149, instead of $179.
There’s no way to see this as anything other than a huge win for AirPods fans. It’s almost as if Apple felt it had to do something to make up for hiking prices everywhere else. The $129 AirPods 5 also deliver better noise cancellation and upgrade the water-resistance to IP57. Meanwhile, paying $20 more for the wireless charging case also puts volume controls on the stems, letting you swipe up or down to adjust volume, similar to how the AirPods Pro work.
