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AI Tax? Why Apple Just Raised Prices On Older iPhones

Rather than discounting older models following its iPhone 18 launch on September 9, Apple has instead raised prices across the iPhone 16, 17e, 17 and Air lineup in India.

AI Tax? Why Apple Just Raised Prices On Older iPhones
Buyers waiting for last year's iPhone to get cheaper after a new launch are in for a surprise
(Photo: Apple)

Buyers waiting for last year's iPhone to get cheaper after a new launch are in for a surprise this time around. Apple has broken from its usual playbook in India, pushing prices upward on older models rather than trimming them, following the September 9 debut of the iPhone 18 Pro, iPhone 18 Pro Max and the foldable iPhone Duo. On Apple's India store today, the entry point for an iPhone 16 sits at Rs 89,900, the 17e opens at Rs 79,900, the standard iPhone 17 now starts at Rs 99,900, and the iPhone Air begins at Rs 1,49,900, each one costing more than it did at launch.

iPhone 17, Air See The Steepest Jumps

Nowhere is the shift more visible than on the iPhone 17. Buyers who wait to pick up the 256GB variant will now pay Rs 99,900 for a phone that debuted at Rs 82,900, effectively erasing any advantage of buying it "used" to the market. The Air's top storage tier climbed even higher, with its 1TB model now going for Rs 2,24,900. Per Reuters, India ranks among the countries hit hardest by these revisions worldwide, with certain models climbing as much as 41% above their original price.

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ALSO READ | Apple Skips AI Spending Race, Bets On Rs 3 Lakh Foldable

Why Older Phones Are Getting Costlier, Not Cheaper

Behind the increase sits a supply-side squeeze that has little to do with iPhones directly. Memory and storage chips, the same components powering AI servers and data centres, have become scarce and expensive as tech giants race to build out AI infrastructure. Tim Cook has previously acknowledged the strain this places on Apple's own costs, and the company now appears to be passing more of that burden onto buyers rather than shouldering it alone, upending the usual expectation that ageing phones only get cheaper with time.

ALSO READ | iPhone 18 Pro, Pro Max: Planning To Buy New Apple Model? Here's All You Need To Know

India's Tax Structure Adds To The Bill

Reuters flagged India specifically as one of the worst-affected markets. Layer in the country's import duties on components and its 18% GST rate, and the gap between Indian and US pricing on the same underlying chip shortage becomes even starker.

Keeping The Price Ladder Intact

There's a business logic at play too. With the iPhone 18 Pro and iPhone Duo anchoring the top of Apple's lineup, nudging older models upward helps the company preserve a structured pricing tier across its range, rather than letting steep discounts on last year's phones undercut the value of its newest, most expensive devices.

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