Why are iPhones so expensive? The UK answer, with Apple's own margins, 20% VAT and the £100 rise of 2026

Against the rest of Europe, the UK comes out well. With VAT included and at the same ECB rate, the UK Apple Store is the cheapest of the five European Apple stores in the calculator for every iPhone on general sale: an iPhone 17 costs £899 here, against the equivalent of about £943 in Germany, £951 in Spain, £960 in France and £969 in Italy. The exception is the iPhone Duo, which goes on sale in October: Germany lists its 256GB and 512GB versions for less (about £1,972 at 256GB, against £1,999 here).

Buying in the US to save the difference has three catches, which TechRadar set out on 11 September 2026: sales tax on top of the US price, 20% import VAT on a phone posted to the UK, and a warranty that Apple may limit to the country where the phone was sold.

On 9 September 2026, the day Apple announced the iPhone 18 Pro and the foldable iPhone Duo, the iPhone 17 went from £799 to £899 overnight, as Stuff reported that day; Apple gave no reason. The same happened across the range Apple launched a year earlier, all at 256GB: the iPhone Air went from £999 to £1,099, the Pro from £1,099 (iPhone 17 Pro) to £1,199 (iPhone 18 Pro) and the Pro Max from £1,199 to £1,299.

The rise is steepest where the memory is. At 1TB the Pro Max went from £1,599 to £1,899, and at 2TB from £1,999 to £2,499.

The cost behind it is memory. TrendForce reported on 10 August 2026 that memory prices had risen five- to sevenfold since the start of 2025, and that memory had gone from about 10% to about 34% of an iPhone's parts bill in a year. In July, Counterpoint Research expected the 1TB iPhone 18 Pro Max to cost nearly $300 more in parts than the 17 Pro Max, and Apple to raise its large-storage models the most so as not to lose margin on them. The UK price list is that forecast, carried out.

The price of the standard iPhone is only part of the story: the other part is how far up the ladder people buy. In 2017 the iPhone X started at £999 in the UK and opened a tier above the standard model. Nine years later the ladder has seven starting prices, from £699 to £1,999, and the gap between two storage sizes has become a rung of its own: on an iPhone 18 Pro, going from 256GB to 512GB costs £200, from 512GB to 1TB £400, and from 1TB to 2TB £600.

If you are choosing storage, we would stop at 512GB on a Pro: above it each step costs £400 or £600, while 2TB of iCloud+ costs £8.99 a month.

Gross margin is what is left of sales after the cost of making and delivering the products, and before research, marketing and running the company. In its 2025 financial year Apple's net sales came to $416.2bn, $209.6bn of them from the iPhone, and it spent $34.55bn on research and development, 8% of sales. It does not publish how many iPhones it sold, so nobody outside Apple can put an exact figure on its profit per phone; our analysis of how much it costs to make an iPhone goes through the teardown estimates model by model.

Services (the App Store, iCloud+, Apple Music, Apple TV and AppleCare) brought Apple $109.2bn in its 2025 financial year, 14% more than in 2024, at a gross margin of 75.4%, twice that of its hardware. In the UK, Apple TV has gone from £4.99 a month at its launch in 2019 to £9.99 today. iCloud+ starts at £0.99 a month for 50GB, cheap enough for a photo library to end up there, and that is also what makes leaving expensive: the library has to move with you.

The other way to price it is per year of use. Under the UK's product security regime (PSTI), in force since 29 April 2024, makers have to state how long a phone will get security updates, and Apple's filing for the iPhone 15 Pro Max promised a minimum of five years from first supply. If the iPhone 17 gets the same five-year minimum, its £899 works out at about £180 a year. Before setting it against a cheaper phone, we would check that phone's declared support period in its maker's PSTI statement: a lower price over fewer years can cost more per year.