Trump tariffs could lead to a 43% price hike on iPhones
Photo: Future
New tariffs imposed by President Donald Trump could lead to a significant increase in iPhone prices, potentially rising by as much as 43%, according to analysts from investment bank Rosenblatt Securities.
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% - if Apple is able to pass that on to consumers, News.Az reports, citing Reuters.
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% increase were to pass to consumers.
Shares of the company closed down 9.3% 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.
"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.
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% to 10% 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% levy and India's coming in at 26%.
Apple would need to raise its prices by at least 30% on average to offset import duties, according to Counterpoint Research co-founder Neil Shah.
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