Apple Reportedly Cuts iPhone 18 Pro Orders: Can Price Hikes Offset Volume and Cost Pressures?

TradingKey - According to a Nikkei report on October 9, Apple (AAPL) has asked certain suppliers to cut component production for the iPhone 18 Pro and iPhone 18 Pro Max.

Related reports suggest that rising memory chip costs and product price hikes have impacted consumer demand. For Apple, if order adjustments persist and affect finished unit shipments, iPhone revenue could come under pressure; whether the increase in average selling price can offset changes in sales volume, along with the magnitude of cost increases, will impact future earnings performance.

Apple Said to Adjust Pro Series Component Orders

Official Apple information shows that the iPhone 18 Pro and Pro Max will go on sale on September 18, with starting prices in mainland China at RMB 9,999 and RMB 10,999, respectively.

The new iPhone models released by Apple this September include two Pro models and the foldable iPhone Duo, with the latter scheduled to go on sale on October 23. The standard iPhone 18 was not unveiled at the concurrent launch event, as new products were concentrated in the high-end price segment. From a demand perspective, higher price tags may affect consumers' willingness to upgrade.

This report involves component production adjustments at certain suppliers, which is not yet sufficient to determine full-year iPhone sales. If order cuts persist and expand to more suppliers, subsequent finished unit shipments could be affected, and order revenues for relevant suppliers may also come under pressure.

Can Price Hikes Offset Volume and Cost Pressures?

iPhone revenue depends on sales volume and the actual average selling price. Price hikes or a higher sales proportion of high-end models help boost revenue, but whether this can offset a decline in sales volume still depends on the magnitude of changes in both; revenue growth cannot be judged solely on an increase in the starting prices of new products.

Costs also impact profitability. Apple has cautioned in its financial reports that rising component costs such as memory may affect gross margins, and that price increases could also dampen demand. If revenue growth is insufficient to offset rising costs, earnings could still come under pressure.

News of these component order cuts is not yet sufficient to confirm a decline in overall device sales. Going forward, it remains to be seen whether order adjustments persist, whether actual shipments decline, and whether price hikes, product mix adjustments, and cost controls can alleviate cost pressures.

AAPL Focus Shifts to iPhone Revenue and Product Gross Margin

In upcoming earnings reports, key focus areas include iPhone revenue, product gross margin, and management's assessment of demand in major markets and component costs. Apple does not separately disclose the gross margin for the iPhone, and product gross margin is also affected by other businesses such as Mac and iPad.

On the supply chain front, key areas to watch include whether the scope of order cuts expands, whether orders recover, and actual sales performance in key markets. If an increase in average selling price can offset declining sales volume, iPhone revenue may still grow; if the impact of lower sales volume outweighs the gains from price hikes, revenue could come under pressure. The impact of rising memory costs on profitability will also depend on product pricing, sales mix, and cost control.