The next iPhone could be dramatically more expensive – because of Donald Trump.
The sweeping tariffs imposed by the US president could lead the iPhone to cost as much as $2,300, analysts have suggested.
The new levies are expected to increase the cost of a variety of consumer products in the US, many of which are made and imported from countries such as China, which have been hit by significant new tariffs under the new regime.
Analysts suggest that costs could rise 30 per cent to 40 per cent – and it is unclear whether the companies are planning to pass on the cost to consumers.
Most tech companies are yet to comment on the impact of the tariffs, the detail of which is still largely unclear.
Most iPhones are still made in China, which was hit with a 54 per cent tariff. If those levies persist, Apple has a tough choice: absorb the extra expense or pass it on to customers.
Shares of the company closed down 9.3 per cent on Thursday, hitting their worst day since March 2020.
Apple sells more than 220 million iPhones a year; its biggest markets include the United States, China and Europe.
The cheapest iPhone 16 model was launched in the U.S. with a sticker price of $799, but could cost as much as $1,142, per calculations based on projections from analysts at Rosenblatt Securities, who say the cost could rise by 43 per cent - if Apple is able to pass that on to consumers.
A more expensive iPhone 16 Pro Max, with a 6.9-inch display and 1 terabyte of storage, which currently retails at $1599, could cost nearly $2300 if a 43 per cent increase were to pass to consumers.
Trump imposed tariffs on a wide range of Chinese imports in his first term as president to pressure U.S. 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% 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.
Expert reviews have suggested that the features, while innovative, do not provide enough of a compelling reason to justify upgrading to newer models.
The stagnation in demand could put additional pressure on Apple's bottom line, especially if costs rise due to tariffs.
Angelo Zino, equity analyst at CFRA Research, said the company will have a tough time passing on more than 5 per cent to 10 per cent of the cost to consumers.
"We expect Apple to hold off on any major increases on phones until this fall when its iPhone 17 is set to launch, as it is typically how it handles planned price hikes."
Even with some production moving to Vietnam and India, most iPhones are still made in China, and those countries were not spared from tariffs either, with Vietnam getting a 46 per cent levy and India's coming in at 26 per cent.
Apple would need to raise its prices by at least 30 per cent on average to offset import duties, according to Counterpoint Research co-founder Neil Shah.
A potentially sharp price hike could dampen demand for the smartphone and give South Korea's Samsung Electronics an edge, as the Asian country faces lower tariffs than China, where all iPhones sold in the U.S. are made.
"Our quick math on Trump's tariff Liberation Day suggests this could blow up Apple, potentially costing the company up to $40 billion," Rosenblatt Securities' Crockett noted, adding that negotiations between Apple, China and the White House are likely.
"It's hard for us to imagine Trump blowing up an American icon...but this looks pretty tough."
Additional reporting by Reuters
