200% instead of 1,200% markup: Apple's iPhone storage upgrades are becoming less profitable

The DRAM crisis is also affecting Apple, as the costs of RAM and NAND flash storage are rising not only for consumers, but also for manufacturers of smartphones, tablets and laptops. A report by the Wall Street Journal now reveals how large Apple's profit margin on iPhone storage upgrades was before and after the start of the DRAM crisis.

According to the report, Apple charged $200 for the upgrade from 256 GB to 512 GB of storage on the iPhone 17 Pro, but paid just $15 for the additional storage – equivalent to a markup of 1,233 percent. For the iPhone 18 Pro, Apple still charges $200 for this storage upgrade, but pays $66 in production costs, so the markup drops to 203 percent. While Apple now charges $600 for the upgrade from 512 GB to 1 TB of storage, rather than $400 as it did last year, production costs have also risen from $42 to $192, bringing the markup down from 852 percent to 212 percent.

A comparison with NAND products on the open market also shows that Apple's storage upgrades are too expensive. While Apple charges a whopping $1,200 for 2 TB of flash storage on the iPhone 18 Pro, a 2 TB M.2 SSD currently costs $299 on Amazon. Apple's gross margin fell from 50.1 percent to 47.9 percent in the third quarter of 2026, but remains at a very high level by historical standards – until 2021, the company generated a gross margin of less than 40 percent.