Key Takeaways
- Bank of America maintained its Buy recommendation for Apple with a $370 target price
- Maximum trade-in values for iPhone 18 Pro Max increased to $1,200, compared to $1,100 for the previous generation
- Enhanced carrier incentives effectively neutralize Apple’s $100 price increases across the iPhone 18 series
- Out-of-pocket expenses at purchase remain between $291 and $405 based on selected model
- Reports indicate Samsung has secured higher memory pricing agreements with Apple, suggesting potential price adjustments in 2027
On Thursday, Bank of America’s Wamsi Mohan maintained his Buy recommendation for Apple (AAPL) with a $370 target, highlighting that enhanced carrier incentives have effectively absorbed the higher pricing of the iPhone 18 series.
Shares of AAPL advanced 1.38% during the trading session.
Apple introduced the iPhone 18 Pro and Pro Max with $100 premiums over their predecessors. The price adjustments extended beyond the flagship models, affecting the iPhone 17 and 16 lineups as well.
According to Mohan’s analysis, top-tier trade-in values for the iPhone 18 Pro Max have reached $1,200, marking an increase from $1,100 for the prior generation and $1,000 two years ago.
“The enhanced promotional offers substantially counterbalance Apple’s price escalation this cycle,” Mohan stated in his note.
Wireless providers have also introduced 36-month payment structures that integrate device installments with service contracts, a move Mohan believes enhances accessibility for purchasers.
Delivery timelines indicate the iPhone 18 Pro and Pro Max are reaching customers more quickly than previous models, and Mohan believes the improved subsidies may sustain consumer interest throughout the initial release phase.
These incentive programs have specific targeting strategies. Wireless carriers are primarily focusing on subscribers with recent-generation devices, aiming to expedite upgrade cycles within this demographic.
Verizon (VZ) and AT&T (T) typically mandate an iPhone 14 or more recent model to access maximum credit values. T-Mobile (TMUS) maintains stricter eligibility criteria, requiring an iPhone 15 Pro or later.
Initial Payment Requirements Remain
Trade-in programs don’t eliminate all purchase expenses. Buyers must cover activation charges plus sales tax calculated on the device’s full retail value, resulting in immediate payments ranging from approximately $291 to $296 for the iPhone 18 Pro and $400 to $405 for the Pro Max variant.
These arrangements benefit carriers as well. They mandate enrollment in premium unlimited service plans, with trade-in values distributed as monthly account credits throughout the financing term, effectively securing long-term customer retention.
Additional Price Adjustments May Be Ahead
The present pricing adjustments might not represent the final changes. Korean industry sources report that Samsung has renegotiated DRAM and NAND pricing with smartphone manufacturers, with Apple reportedly agreeing to the revised terms.
Beginning in the first quarter of 2027, Apple is anticipated to pay approximately $2.00 per gigabit for LPDDR5X RAM, up from $1.50 in the third quarter of 2026. NAND flash memory costs are projected to climb from $0.26 to $0.33 per gigabit during the same timeframe.
Not all smartphone makers accepted these terms. Both Oppo and vivo reportedly declined Samsung’s increased pricing structure, leaving questions about which memory suppliers they’ll engage for upcoming flagship releases.
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