Apple's smartest move was not joining the AI race. Now it's in a better position to charge $200 more for the iPhone 18 Pro

The latest Reuters report tells the story of how Apple didn't follow the rest of Big Tech into the AI spending frenzy, and that decision is starting to pay off. While rivals poured hundreds of billions of dollars into AI data centers, Apple kept its spending under control and focused on selling more devices.

Now, analysts believe the company is in a stronger position than ever to raise iPhone prices without scaring away too many buyers.

Instead of raising iPhone prices to deal with the rising cost of memory and storage chips, the company increased the prices of some iPads and MacBooks while leaving its most important product untouched.

Of course, that's to change this coming September, when none other than Tim Cook hinted at price hikes.

But the iPhone's stagnated prices up until now could account for Apple's strongest June-quarter sales growth in five years.

RAMpocalypse now

The RAM and storage chip shortage (caused by AI projects and data centers) is what got many Android phone makers to pass the higher costs on to customers. This, in return, "helped" tank global smartphone shipments to their lowest Q2 level in 13 years. Apple, meanwhile, shipped 3% more iPhones during the same quarter and increased its global market share to nearly 20%, according to Counterpoint Research.

Unlike rivals such as Microsoft, Google, Meta and Amazon, Apple hasn't spent enormous sums building AI data centers. As more investors question whether those massive AI investments will actually pay off, Apple has reclaimed the title of the world's most valuable company from Nvidia. Its stock has climbed nearly 25% this year, briefly pushing its market value above $5 trillion.

Steady in the eye of the storm

Even with higher iPhone prices, analysts don't expect demand to take a major hit. Apple's ecosystem keeps many customers loyal, making them less likely to betray Apple and switch brands because of a price increase. Morgan Stanley says the iPhone is Apple's least price-sensitive product, followed by the Mac and then the iPad.

Apple is expected to report revenue of about $108.7 billion for the April-June quarter, up 15.5% year over year and its strongest June-quarter sales growth since 2021. iPhone revenue is expected to jump more than 20%, while Mac sales should also improve despite higher prices. Only iPad growth is expected to slow slightly.

Price hikes ahead

All this goes to show that Apple probably had something in mind when it deliberately avoided the AI spending race.

So even if the iPhone 18 Pro lands with a $100–$200 price hike and some users turn their back on Cupertino, Apple at least won't have to worry whether their multi-billion dollar AI investment will pay off anytime soon.