Apple Storage Upgrade Markups Soar Amid Memory Costs

Apple's gross margin fell to 47.9 percent in the third quarter of 2026 as the DRAM crisis raised memory costs for device makers.

Updated on Nov. 4, 2026 in Semiconductors

Close-up photograph of a bare silicon memory wafer with identical unlabeled chip dies under cool raking light on a brushed metal surface. — Apple raised prices on iPhone storage upgrades as DRAM costs surged, cutting its third-quarter gross margin to 47.9 percent. AI Illustration. Upload story photo >

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Apple raised prices on iPhone storage upgrades as the DRAM crisis increased memory costs for smartphone, tablet, and laptop manufacturers. The company's gross margin fell to 47.9 percent in the third quarter of 2026.

Why it matters

Rising costs for RAM and NAND flash storage are pressuring manufacturers across consumer electronics. The disclosed markups show how upgrade pricing has shifted for buyers choosing larger iPhone storage tiers.

The figures come from comparing Apple's upgrade prices with its own production costs for added storage, with a 2 TB M.2 SSD costing $299 on Amazon as an outside reference. The extraction does not indicate how Apple's production costs will move going forward.

The players

Apple

Apple is a multinational technology company based in Cupertino, California, known for designing the iPhone and related consumer hardware.

Amazon

Amazon is a major U.S. online retailer where a 2 TB M.2 SSD is sold for $299, used here as a comparison point for storage pricing.

The details

Apple charges $200 for the 256 GB to 512 GB upgrade on the iPhone 18 Pro, against $66 in production costs, while the 512 GB to 1 TB upgrade is priced at $600 against $192 in costs. The 512 GB to 1 TB markup fell from 852 percent to 212 percent, and Apple charges $1,200 for 2 TB of flash storage.

Storage memory costs began rising at the start of the DRAM crisis.
Apple's gross margin stayed below 40 percent until 2021.
Apple's gross margin fell to 47.9 percent in the third quarter of 2026.

Market Landscape

The DRAM crisis is raising memory costs across the smartphone, tablet, and laptop sectors, and Apple's upgrade margins show that manufacturers are passing some of that pressure onto buyers choosing larger storage tiers. Apple's gross margin rising to 47.9 percent in the third quarter of 2026 places it well above the sub-40 percent levels it held until 2021.

Buyers choosing a 512 GB or 1 TB iPhone 18 Pro face substantially higher upgrade prices than the production cost of the added storage. The gap between what Apple charges and what it pays for the memory means higher-capacity models cost considerably more to buy than to build.

The takeaway

Storage upgrade pricing on premium iPhones now carries large markups over production cost, so buyers weighing a higher capacity should compare the upgrade price against the base model before committing. The DRAM-driven cost pressure shown here is one reason memory-heavy device pricing may stay elevated.