As Trump announced 54% ‘reciprocal tariffs’ on US imports from China, the price of Apple products could skyrocket. According to the analysts at Rosenblatt Securities, if Trump’s tariffs are imposed on iPhone 16, the price will jump from $799 to $1142, and the top-of-the-line iPhone 16 Pro Max may cost $2300.
After these tariffs, even the lower-priced products like the iPhone 16e, launched in February at the price of $599, will rise to $856. Barton Crockett, an analyst at Rosenblatt Securities, said
“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,”
What May Apple do?
To adjust to Trump’s high tariffs on Chinese imports, Apple now needs a new strategy. It could
- Eat the cost of the higher import tax
- Drop its profit margins on the device by a notable amount
- Pass all of the tariff on consumers
Apple May Not Raise Prices
In contrast to Rosenblatt Securities’ analysis, Angelo Zino, equity analyst at CFRA Research, opines that Apple will have a hard time hiking iPhone prices by more than 5% to 10%. This decision is hard for Apple considering weak sales due to less excitement over Apple’s AI initiative, Apple Intelligence. The analyst said
“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.”
Apple Shares Hit Rock Bottom
Owing to the dropping stock of Apple, the pricing of Apple products is also hard to decide. On Thursday, the shares of the company reached 8.5%, hitting their worst day since March 2020. These plummeting rates wipe out nearly all the gains Apple made in the stock after closing above $200 last summer.
Apple’s Semiconductor Partner TSMC is already facing a Delay
Recently, in March, Taiwan Semiconductor Manufacturing Company (TSMC) announced it to invest $100 billion in the U.S., following Apple’s plan to invest $500 billion in US manufacturing. However, TSMC is already facing a delay in producing advanced chips for Apple in the US. For Apple, if the US-based TSMC plants operationalize, it will ease the manufacturing of Apple products as the main component: semiconductor chips will be closer to home. Now Trump has imposed Tariffs on Chinese imports, and most of the Apple products are manufactured in China, Apple may pressurize its semiconductor partner to accelerate efforts to operationalize US facilities.
Notably, Apple sells more than 220 million iPhones per year, the US being one of the biggest markets.
