Apple has implemented price increases of roughly 15% to 25% across Mac, iPad and accessory lines, a move Morgan Stanley describes as an unprecedented attempt to defend gross margins amid unusually high memory cost inflation. In a note distributed to investors on Friday, analyst Erik Woodring argued the scale of the adjustments suggests Apple is focused on preserving margins rather than only offsetting higher input costs.
Morgan Stanley said it could not identify comparable price adjustments of this magnitude over the past 15 years, except for changes limited to specific models. The bank contrasted this latest action with its prior pricing assumptions, noting that its earlier expectation of 5% to 10% like-for-like increases on non-iPhone products likely underplayed the actual pricing Apple enacted.
"We have shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products," an Apple spokesperson said, according to the note.
The research team highlighted that demand elasticity will determine how much these higher prices affect sales, yet emphasized that Apple's ecosystem and customer lock-in historically support relatively steady pricing power and some degree of demand inelasticity. Morgan Stanley illustrated this point by noting that a $200 to $300 one-time increase translates to approximately $4 to $6 per month when spread over a four-year replacement cycle.
Regarding the next iPhone generation, Morgan Stanley continues to model a $100 like-for-like starting price increase for the iPhone 18, but the bank acknowledged uncertainty about Apple’s margin approach for its most important product. Industry checks cited by Morgan Stanley have not shown reductions in iPhone build plans, which the bank said could indicate Apple may apply more modest price increases to its flagship device.
Contextual analysis
Morgan Stanley’s revised view implies potential upside to its revenue and earnings-per-share estimates for Apple, driven by higher-than-anticipated pricing on non-iPhone devices. At the same time, the firm flagged open questions about how consumers will respond and how Apple will balance pricing with margin targets on the iPhone.