Apple iPhone Prices Expected to Soar Due to New US Export Tariffs
The new export tariffs imposed by the United States are set to raise the prices of Apple’s flagship product, the iPhone. This is due to the changing global trade landscape and the impact on global goods. In particular, the iPhone is expected to be the most affected product, burdening consumers with price increases of up to 30-40%.
The majority of iPhones are still manufactured in China, which is subject to tariffs up to 54%. Analysts believe that if these tariffs continue, Apple faces a difficult decision of either absorbing the additional costs or passing them on to customers. As a result, Apple’s stock closed down 9.3% on Thursday, marking their worst day since March 2020. Apple sells over 220 million iPhones annually, with their largest markets including the United States, China, and Europe.
The entry-level iPhone 16 is currently priced at US$799 in the US, but analysts project that prices could surge to almost US$1,142, representing a 43% increase for consumers. Similarly, the higher-end iPhone 16 Pro Max, with a 6.9-inch screen and 1 terabyte of storage, is currently priced at US$1599, but could skyrocket to nearly US$2300.
Experts express concerns over how these trade tariffs are contradicting expectations regarding Apple’s global presence. Market analysts also note that the sales of iPhones have been underwhelming recently, particularly as new features like Apple Intelligence failed to excite buyers. As a result, some predict that Apple may delay significant price hikes until the launch of the iPhone 17 later in the fall season.
According to Neil Shah, a Co-founder of Counterpoint Research, Apple may need to increase prices by at least 30% on average to offset import duties. However, these rapid calculations of the Trump Tariff Liberation Day could potentially lead to significant losses of up to US$40 billion for the company.
Given these challenges, Apple is facing tough decisions on pricing strategies and market reactions to the new export tariffs.
