Author｜Wenser, Odaily Planet Daily
Have you ever wondered how much profit from selling an iPhone goes to various component suppliers?
Recently, overseas tech blogger @BluthCapital mocked the "business acumen" behind the iPhone, quoting the CEO of Micron: "For over a decade, Apple has been buying chips from us (MU) for $5, putting them into metal boxes, and then selling them to consumers for $99; when we tried to raise the price to $7, they switched to laugh mode. But now, when we want to charge them $50, they raised the product price by $250." His words express disdain for Apple's recent price increase and blame-shifting onto memory manufacturers.
The post quickly sparked discussions on social media. This morning, @BluthCapital continued the topic by posting a cost structure diagram for the iPhone 18 that includes specific numbers to support his argument:
Previously, Micron's Chief Business Officer Sumit Sadana also mentioned in an interview with the Wall Street Journal that, "During the downturn in the memory industry, certain customers took the opportunity to push prices down, resulting in negative profits for the company." Now, due to strong demand from AI and the tech industry, the memory sector has turned into one that holds the power of discourse. This has caused the entire industry chain to experience "thirty years of ups in the east, thirty years of downs in the west."
Profit structure of an iPhone: Apple takes nearly 25%, memory manufacturers like Micron take less than 3%
It is estimated that Apple takes about a quarter of the profit from an iPhone, while memory giants can only take about a thirtieth, and TSMC takes around 4%-5% due to its monopolistic status; the rest is covered by other hardware suppliers, channels, research and development, and taxes.
Looking back at Apple's financial reports: Net profit margin has remained above 24%, capturing 75% of the total industry profits
According to data from organizations like Counterpoint, Apple has long occupied nearly 50% of the global mobile phone market operating profit. IDC data for 2025 shows that it took approximately 75% of the industry's total profits with 18% market share.
Based on Apple’s latest data for Q2 2026, iPhone revenue amounted to $57 billion, net profit was $34 billion, estimating a shipment volume of about 61 million units. Thus, it can be deduced that Apple's net profit per iPhone is about $320-340, with a net profit margin of 33%-36%.
From the comparison of financial report data over the past five years, we can also clearly see that the overall performance of iPhone revenue has remained relatively stable; the scale of net profit has gradually increased from about $94 billion in 2021 to about $112 billion in 2025; the net profit margin remains relatively stable, usually around 25%.
When looking at different models such as the 2017 iPhone X, 2023 iPhone 14 Pro, and 2026 iPhone 17 series, their profit structure has undergone a series of changes due to different memory costs.
From iPhone X to iPhone 17: Memory cost has doubled
The role of memory costs in iPhones has gone through three historical stages: from the early "scrap" to the later "important component," and now to "key part."
2017 iPhone X era: Memory as "scrap"
According to Counterpoint's teardown report from that year, during the iPhone X era, due to its longstanding brand advantages and upstream ecological position, Apple's net profit once approached 50%; while Korean memory manufacturers like Samsung and Hynix took only about 135-195 RMB; that accounted for about 1.6%-2.3% of the total price of 8388 RMB.
This reflects the "memory" weight during the iPhone X era: about 2% of the cost, almost the least concerning component for Apple.
2023 iPhone 14 Pro era: Memory as "important component"
In 2023, with the launch of the iPhone 14 series, Apple’s material costs slightly increased. For example, in the case of the Pro version, its BOM material cost reached about $464 (approximately 3170 RMB), accounting for nearly 40% of the selling price, yet Apple's net profit still maintained around 40%.
According to feedback from tech media at that time, the above data was only for the 128G version, while the cost increase for the more expensive memory versions was not high, but the selling price was much higher. At that time, it was in a period of "rising camera and processor prices," therefore, the final overall profit of the iPhone 14 Pro was 3.7% lower than that of the iPhone 13 Pro.
2026 iPhone 17 era: Memory as "key component"
Fast forward to 2025-2026, the iPhone 17 series becomes Apple’s main model, and its memory costs have doubled compared to a few years ago. Currently, the expected proportion of memory costs in the BOM material costs has reached 12%-15%, approximately $60-80.
In summary, below are the relevant data on costs and memory cost proportions for iPhones during different periods.
It's worth mentioning that TrendForce data shows that in the first quarter of 2026, the general DRAM contract price increased by 93% to 98%. Citigroup expects that the average DRAM price increase for the entire year of 2026 will reach 88%. Overall, this aligns with the trend of rising memory costs. This phenomenon has also garnered approval from Apple CEO Cook and Musk.
Cook: Memory price increase, a once in 40 years event
On June 17, Apple CEO Cook (Odaily Planet Daily note: He will step down as CEO in September this year, to be succeeded by former Senior Vice President of Hardware Engineering John Ternu) mentioned the cost pressure from the memory price increase in an interview with the Wall Street Journal. He stated: “When consumers need devices, the supply has decreased, and memory manufacturers are passing on enormous price hikes. We absolutely need memory pricing and supply to return to reasonable levels for consumer products. This is the bottom line.”
But less than a week later, he quickly changed his tune.
On June 25, Cook again spoke to the Wall Street Journal, describing the cost shock as "a once in a century flood," saying: “In over 40 years, I have never seen anything like this in any field.” Subsequently, Apple announced price increases across the board for products including Mac, iPad, HomePod, Apple TV, Vision Pro, etc.
After the news broke, Apple’s stock price fell by 6%, evaporating $263 billion in market value; marking the largest drop since April 2025.
Musk: I've never seen anything like this either
Cook's remarks also drew strong agreement from Musk. Recently, he also posted: “Cook told the Wall Street Journal that this cost surge is something he 'has never witnessed in any field in over 40 years'. I agree; this is the most intense price spike I have ever seen.”
Thanks to AI data centers and HBM, memory's position has strengthened
A closer look at the "memory bull market" that began last year reveals that the key driving factor is the strong demand from the AI sector.
The industry generally estimates that each AI server requires 8 times the DRAM and 3 times the NAND compared to ordinary servers.
Based on such market demand, the three major memory giants, Samsung, SK Hynix, and Micron, naturally shift more advanced process capacity towards high-profit HBM (High Bandwidth Memory) and high-end DDR5 products, actively reducing consumer-grade production lines like DDR4, which leads to shortages of general DRAM.
Public data shows that the DRAM capacity in an AI server is 8 to 10 times that of traditional servers; combined with restocking of general servers and the demand for AI PCs, the supply-demand gap for memory chips continues to widen.
Previously, Micron's Q3 financial report showed an astonishing gross margin of 84.6% and a year-on-year revenue growth of 346% to $41.46 billion, showcasing the cash generation ability of monopolistic memory manufacturers. On the other hand, SK Hynix recently announced plans to list in the U.S., seeking to raise approximately $29 billion to further profit from the memory demand.
It is not an exaggeration to say that memory demand from the AI industry is squeezing or even consuming the memory supply for consumer electronics. Data shows that the memory used in a NVIDIA's Vera Rubin AI server is equivalent to that used in about 14,500 MacBook Neos, reflecting the current imbalance in supply and demand for memory.
For memory manufacturers who have previously suffered from pricing pressures from giants like Apple, it is now their time to shine. No wonder there are reports that Apple is actively lobbying the Trump administration, hoping to get approval to purchase memory chips from Chinese chip maker Changxin Storage.
As for whether Changxin Storage can replicate the wealth creation miracles of star companies like SK Hynix and Micron in the capital market, perhaps the answer will be revealed next month.
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