Tariffs Could Push iPhone Prices Past $2,300: How Trump's Policies Might Affect Your Wallet
Your beloved iPhone might soon get more expensive due to new tariffs. Recently, US President Donald Trump introduced extensive tariffs targeting various nations worldwide, which may significantly reshape international commerce dynamics. According to experts speaking on Thursday, everyday items such as iPhones could face considerable price hikes—possibly upping by 30 percent to 40 percent—if these costs are transferred onto customers.
Many iPhones continue to be manufactured in China, where they faced a 54 percent tariff. Should these duties remain in place, Apple will have a difficult decision to make: either shoulder the additional cost or impose higher prices on consumers.
The stock price of the firm dropped over 8 percent following the announcement of tariffs, heading towards its poorest performance since September 2020.
Each year, Apple manages to sell over 220 million iPhones globally, with key markets being the United States, China, and regions within Europe. The starting price for the most affordable iPhone 16 variant introduced in America stands at around $799, though this can go up significantly depending on various factors. According to forecasts from Rosenblatt Securities' analysts, prices might jump by approximately 43%, potentially reaching as high as $1,142. For an even pricier option like theiPhone 16ProMax—featuringa6.9-inchdisplayandone terrabytesofstorage—thecurrentretailpriceis$1,599.However,shouldthesamepercentageincreaseapply,thismodelcouldcostclose tonearly$2,300.
Trump imposed tariffs on a wide range of Chinese imports in his first term as president to pressure US companies to bring manufacturing either back to the United States or to nearby countries such as Mexico, but Apple secured exemptions or waivers for several products. This time, he has not yet granted any exemptions.
"This whole China tariff thing is playing out right now completely contrary to our expectation that American icon Apple would be kid-gloved, like last time," Barton Crockett, analyst at Rosenblatt Securities, said in a note. The iPhone 16e, launched in February as a cheaper entry point for Apple's suite of artificial-intelligence features, costs $599. A 43 per cent price hike could push that cost to $856. Prices of other Apple devices could jump as well. Apple did not immediately respond to a request for comment. Many customers pay for their phones over a period of two or three years through contracts with their cellular providers. However, other analysts noted that iPhone sales have been floundering in the company's major markets, as Apple Intelligence, a suite of features that helps summarize notifications, rewrite emails and give users access to ChatGPT, has failed to enthuse buyers.
Experts have indicated that although the features are novel, they fail to offer sufficient motivation for consumers to upgrade to more recent versions.
A slowdown in demand might add extra strain to Apple’s financial performance, particularly if expenses increase because of tariffs.
Angelo Zino, an equity analyst at CFRA Research, stated that the firm would struggle to transfer over 5 percent to 10 percent of the increased costs onto customers.
We anticipate that Apple will delay significant price increases for smartphones until this autumn, coinciding with the anticipated release of the iPhone 17, which is consistent with their usual approach to scheduled price adjustments.
Despite some manufacturing shifting to Vietnam and India, the majority of iPhones continue to be produced in China. Both these nations faced tariffs as well, with Vietnam encountering a 46 percent duty and India facing one set at 26 percent.
To compensate for the import tariffs, Apple might have to increase its prices by approximately 30 percent on average, as stated by Neil Shah, co-founder of Counterpoint Research.
A significant increase in prices might reduce the demand for smartphones, giving South Korea’s Samsung Electronics an advantage. This situation arises because products from Asia generally face fewer import duties compared to those coming out of China, which manufactures all iPhones sold in the U.S.
Based on our rapid calculations regarding Trump's tariff liberation event, this might severely impact Apple, possibly resulting in losses of up to $40 billion for the company," observed Crockett from Rosenblatt Securities, noting also that talks involving Apple, China, and the White House are expected.
Imagining Trump damaging an iconic part of America seems challenging...yet this situation appears quite serious.
