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# Apple's iPhone Storage Markup Shrank. Its Profit on Every Upgrade Didn't.
- URL: https://www.techbetweenthelines.com/iphone-18-pro-storage-upgrade-markup/
- Published: 2026-11-04T21:26:18.000Z
- Updated: 2026-11-04T21:26:18.000Z
- Description: Apple now charges about three times its estimated cost for the iPhone 18 Pro's 1TB upgrade, down from nine and a half. It also makes more on each one.
- Author: Justin Scharlemann
- Tags: Analysis, iPhone, Apple, #toc

Moving an iPhone 18 Pro from 256GB to 1TB adds $600 to the price, taking it from $1,199 to $1,799 on Apple's store. According to a [Wall Street Journal analysis reported by 9to5Mac](https://9to5mac.com/2026/11/04/apple-still-charging-300-of-costs-on-iphone-storage-upgrades-says-wsj/?ref=techbetweenthelines.com), the extra flash behind that upgrade costs Apple about $192\. That's a little more than three times cost, and most of the coverage this morning has run with that ratio.

The same analysis has a second number that tells a different story. On last year's iPhone 17 Pro, the same 256GB to 1TB step cost buyers $400, and the Journal put Apple's cost at about $42\. Apple was charging roughly nine and a half times cost then. So the markup fell by about two thirds in a year, and Apple still makes more money on each 1TB upgrade than it did before. Both of those are true, and which one you lead with mostly decides how the story reads.

## What the numbers actually show

Do the subtraction on the Journal's estimates and the gap between price and cost on the 1TB step went from about $358 on the iPhone 17 Pro to about $408 on the iPhone 18 Pro. Apple charged $200 more for the upgrade, while its cost for the memory went up by roughly $150.

| 256GB to 1TB         | Price to you | Estimated cost to Apple | Difference |
| -------------------- | ------------ | ----------------------- | ---------- |
| iPhone 17 Pro (2025) | $400         | About $42               | About $358 |
| iPhone 18 Pro (2026) | $600         | About $192              | About $408 |

The figures come with limits. The cost numbers are the Journal's estimates, not numbers Apple publishes, and they cover the memory chips themselves. They don't include anything else that goes into offering a configuration, and Apple hasn't commented on them. The Journal's comparison also covers only the jump to 1TB. The smaller jump to 512GB is still $200, the same as last year, and the 2TB model sits at $2,399, which is $1,200 above the base phone.

Apple's cost for that memory more than quadrupled because of what happened to the memory market. Flash storage and RAM have been pulled toward AI data centers all year, and prices for everyone else have climbed with them. In June, Tim Cook called the shortage a "hundred-year flood" in an interview with the Journal, and Apple raised prices across the [Mac and iPad lineups while leaving the iPhone alone](https://www.techbetweenthelines.com/apple-spared-the-iphone-from-the-memory-crisis-the-mac-wasnt-so-lucky/). The iPhone's turn came with the new models in September: the iPhone 18 Pro starts $100 higher than the iPhone 17 Pro did, and the 1TB step went up $200 on top of that.

## The case that it's too much

For people who think Apple overcharges, the core of the argument hasn't changed with the ratio. An iPhone has no memory card slot, so the only way to get more space on the phone is to buy it from Apple at the moment you buy the phone. There's no competing seller and no way to add more later. Critics see a shrinking ratio as cold comfort when the buyer still pays more than three times cost for a part only one seller offers, and when the gap on that one option has grown to about $408.

The open market makes the gap easy to see. [Notebookcheck pointed out](https://www.notebookcheck.net/200-instead-of-1-200-markup-Apple-s-iPhone-storage-upgrades-are-becoming-less-profitable.1442172.0.html?ref=techbetweenthelines.com) that a 2TB M.2 SSD was selling for $299 on Amazon at the time of writing, while Apple charges $1,200 to take an iPhone 18 Pro from 256GB to 2TB. The people who need the most storage are also often the ones Apple markets the Pro phones to hardest: anyone shooting ProRes or 4K video at high frame rates fills a phone quickly, and Apple's own camera features are a big part of why.

## The case for Apple's pricing

The other side starts with what the Journal's estimate leaves out. A chip price isn't the full cost of selling a storage tier. Apple has to qualify the memory, build and stock separate configurations, and back every one of them with the same warranty and support, and none of that shows up in a component estimate. 9to5Mac also notes that comparisons with third party storage often line up unlike parts: the flash inside an iPhone isn't the same thing as a retail SSD or memory card, so the $299 drive is a reference point rather than a like for like price.

Tiered storage pricing isn't unique to Apple either. When Samsung launched the Galaxy S26 Ultra in February, [it charged $500 to go from 256GB to 1TB](https://m.gsmarena.com/here%5Fis%5Fthe%5Fsamsung%5Fgalaxy%5Fs26%5Fseries%5Fpricing%5Fbreakdown-news-71720.php?ref=techbetweenthelines.com) in the US, $1,300 against $1,800\. Phone makers across the industry price storage as a premium option rather than at cost. The usual defense of that model is that the higher tiers help hold down the price of the base phone, though no company publishes figures that would show how much.

Then there's the margin picture Apple reported this week. In [its September quarter results](https://www.techbetweenthelines.com/apple-q4-2026-earnings/), Apple guided gross margin down to 45 to 46 percent for the holiday quarter, from 47.9 percent, and CEO John Ternus told CNBC that "we saw higher memory costs as compared to the June quarter." He also said Apple raised prices "reluctantly." Seen from that angle, Apple raised the 1TB price by roughly what its memory bill rose, $200 against about $150, and left the 512GB price alone while that memory got more expensive too.

## What it means if you're buying

Whichever side of that you land on, the practical question for anyone buying an iPhone this holiday season is the same: how much storage do you actually need?

For most people, 256GB is still enough, especially with iCloud Photos set to Optimize iPhone Storage, which keeps full resolution originals in iCloud and smaller copies on the phone. The step to 512GB at $200 is where the math changes fastest for people who keep years of photos and video on the device or download a lot of media for travel. The 1TB and 2TB tiers make the most sense for people who record ProRes or other large video formats directly to the phone, although the Pro models can also record ProRes straight to an external drive over USB-C, which is a much cheaper way to get that space if you shoot that way often.

It's also worth comparing the upgrade with iCloud. Apple's 2TB iCloud+ plan costs $9.99 a month, so the $600 jump to 1TB pays for about five years of 2TB iCloud storage, which can be shared with your family and carries over to your next iPhone. iCloud doesn't help if you need the space on the phone itself, like when you're recording video with no connection, but it covers most photo libraries. If you're already running out of room on the phone you have, our guide to [freeing up space in iOS 27](https://www.techbetweenthelines.com/iphone-storage-full-how-to-free-up-space-ios-27/) covers what to clear first before you pay for more.

## What to watch next

The Journal's analysis lands at an awkward moment for both readings. Apple says higher memory costs will keep pressing on its margins this quarter, and its guidance doesn't suggest relief soon. If memory prices keep rising, the ratio between what Apple pays for storage and what it charges will keep narrowing on its own, even if Apple never changes a price.

The bigger tell will come with next year's iPhones. Apple has three ways to handle a higher memory bill: raise the starting price again, raise the storage steps, or let the markup keep shrinking and take the hit on margin. This year it did a little of the first two. Where the iPhone 19 Pro's prices land will show which one Apple thinks its customers will accept.