Apple may be forced to hike prices across its product lineup to offset the impact of tariffs, with one analyst warning that an iPhone could cost a staggering $3,500 (£2,700) if manufacturing shifts to the US.
That would put the smartphone— Apple’s biggest money-spinner 18 years after its debut — in the same league as the company’s Vision Pro headset, a device that struggled to break into the mainstream due to its sky-high cost.
Speaking to Bloomberg TV about the potential fallout from Donald Trump’s reciprocal tariffs, Wedbush Securities analyst Dan Ives said: “If you want $3,500 iPhones, we should build them in New Jersey, we should build them in Texas. If you like $1,000 iPhones, you build them in China.”
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Apple has been among the worst-hit companies as a result of the repercussions of Trump’s tariffs. Its stock price tumbled more than nine per cent on Thursday, outpacing the six per cent drop for the tech-heavy Nasdaq.
The reason behind the slide is simple: Apple’s supply chain makes it a prime target for tariffs. While its products are designed in sunny California, the company sources parts from across Asia, with key manufacturing hubs in China, Vietnam, India, and Thailand.
Apple has worked to diversify its supply chain to reduce reliance on China, but Trump’s latest round of global tariffs puts it directly in the crosshairs.
No matter how you slice it, Apple faces a tough choice. It can absorb the cost of tariffs to keep prices steady — at the expense of revenue, growth, and a further hit to its stock price. In turn, this would leave it with less capital for research and development, potentially stifling innovation and giving rivals, particularly Chinese manufacturers, an opportunity to close the gap.
Alternatively, as some analysts predict, Apple may choose to pass the costs onto consumers by hiking prices in the short term — a move that could test customer loyalty.
Rosenblatt Securities told Reuters that Apple may have to raise prices across its product range by 17 to 18 per cent.
As a result, the base iPhone 16, which launched at £799, could jump to £1,142 — an unprecedented 43 per cent hike. Meanwhile, the souped-up iPhone 16 Pro Max, with a bigger screen and 1TB of storage, could soar from £1,599 to nearly £2,300.
Impact of Trump tariffs on Apple's supply chain
- China: 54% tariff
- Vietnam: 46% tariff
- India: 27% tariff
- South Korea: 26% tariff
- Japan: 24% tariff
- Thailand: 36% tariff.
However, there’s still a potential reprieve for Apple if it can secure exemptions on US tariffs, much like it did during the first Trump administration when it successfully lobbied for relief on Chinese imports.
Analysts have long predicted that Apple will hike prices this year as it prepares a rumoured line-up of overhauled iPhones, including a foldable model and an ultra-slim handset.
While Apple caters to a more affluent crowd — many of whom opt for high-end models and spread the cost over years via mobile contracts — a £2,700 iPhone is sure to be a hard sell.
