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

TradingKey - According to Nikkei News reports on October 9, Apple (AAPL) has asked some suppliers to reduce component production for the iPhone 18 Pro and iPhone 18 Pro Max.

Related reports suggest that rising storage chip costs and product price increases have affected consumer demand. For Apple, if the order adjustments continue and impact overall device shipments, iPhone revenue could come under pressure; whether the increase in average selling price can offset changes in sales volume and the magnitude of cost increases will affect future profitability.

Apple Reportedly Adjusts Pro Series Component Orders

Apple's official data shows that the iPhone 18 Pro and Pro Max launched on September 18, with starting prices in mainland China of RMB 9,999 yuan and 10,999 yuan respectively.

The new iPhone models Apple released in September include two Pro variants and the foldable iPhone Duo, the latter scheduled to launch on October 23. The standard iPhone 18 was not introduced during this event, with new products concentrated in the premium price segment. From a demand perspective, the higher pricing may affect consumers' willingness to upgrade their devices.

The reported component production adjustments for some suppliers are not sufficient to determine annual iPhone sales. If order cuts persist and expand to more suppliers, this could impact subsequent device shipments, and related suppliers' order revenues may also face pressure.

Can Price Increases Offset Sales and Cost Pressures?

iPhone revenue depends on sales volume and actual average selling price. Price increases or a higher proportion of premium model sales can help boost revenue, but whether this offsets declining sales depends on the magnitude of both changes. One cannot simply conclude revenue growth based solely on the increase in new product starting prices.

Costs also affect profitability. Apple has already warned in its financial reports that rising component costs such as storage could impact gross margins, and price increases may also weaken demand. If revenue growth is insufficient to offset cost increases, profitability may still face pressure.

The reported component order cuts are not sufficient to confirm device sales declines. Going forward, it is necessary to monitor whether order adjustments persist, whether actual shipments decrease, and whether price increases, product mix adjustments, and cost controls can alleviate cost pressures.

AAPL: Subsequent Focus on iPhone Revenue and Product Margins

The focus of upcoming financial reports will be on iPhone revenue, product margins, and management's assessment of demand in major markets and component costs. Apple does not separately disclose iPhone-specific margins, and product margins are also affected by businesses such as Mac and iPad.

On the supply chain side, the key is to observe whether order cuts expand, whether orders recover, and actual sales performance in major markets. If the increase in average selling price can offset the decline in sales volume, iPhone revenue may still grow; if the impact of declining sales exceeds the revenue increase from price increases, revenue may face pressure. The impact of rising storage costs on profitability also depends on product pricing, sales mix, and cost controls.