Apple faces a difficult decision as newly imposed tariffs by President Donald Trump could dramatically increase iPhone prices by up to 43%, potentially pushing the cost of premium models to nearly $2,300.
With a 54% tariff now placed on goods from China, where most iPhones are manufactured, Apple must either absorb these substantial costs or pass them on to consumers. Analysts at Rosenblatt Securities tells Reuters the Apple would need to raise prices by 43% to offset the impact.
Under such an increase, the base model iPhone 16, currently priced at $799 (Rs 79,900), could jump to $1,142 (around Rs 98,000), if Apple passes the full impact of the 54% tariff on Chinese goods to consumers, according to analysis by Rosenblatt Securities reported by Reuters.
More premium models would see even steeper increases, with the iPhone 16 Pro Max potentially reaching nearly $2,300 (Rs 1,97,000) – up from its current $1,599 ( Rs 1,19,900) retail price.
The impact extends beyond flagship devices—the recently launched iPhone 16e, Apple's more affordable AI-capable phone, could see its price rise from $599 (Rs 59,900) to $856 (Rs 72,200).
Apple had exemptions for China tariffs in Trump’s first terms, and it could approach the Trump for the same this time again
Unlike during Trump's first term, when Apple secured exemptions for several products, no waivers have yet been granted under the new round of tariffs. "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, told Reuters.
Apple's predicament stems from its deeply entrenched Chinese manufacturing base. Even with some production shifted to Vietnam and India, these countries face their own new tariffs at 46% and 26% respectively, leaving few manufacturing havens for the company.
Analysts suggest Apple may struggle to pass the full cost increase to consumers. Angelo Zino of CFRA Research believes the company can only transfer 5% to 10% of the higher costs to buyers, potentially delaying major price increases until the iPhone 17 launch this fall.
With iPhone sales already slowing in major markets and Apple's new AI features failing to drive significant upgrades, the company's bottom line faces mounting pressure.
The situation highlights the vulnerability in the triangular relationship between Apple, China as manufacturer, and the United States as both regulator and major market. With Apple selling over 220 million iPhones annually across global markets, these tariffs could "blow up an American icon...potentially costing the company up to $40 billion," according to Rosenblatt Securities. So, negotiations between Apple, China and the White House are likely forthcoming, and Apple CEO Tim Cook have had a healthy strategic and pragmatic relationship with the US President Trump.
With a 54% tariff now placed on goods from China, where most iPhones are manufactured, Apple must either absorb these substantial costs or pass them on to consumers. Analysts at Rosenblatt Securities tells Reuters the Apple would need to raise prices by 43% to offset the impact.
Under such an increase, the base model iPhone 16, currently priced at $799 (Rs 79,900), could jump to $1,142 (around Rs 98,000), if Apple passes the full impact of the 54% tariff on Chinese goods to consumers, according to analysis by Rosenblatt Securities reported by Reuters.
More premium models would see even steeper increases, with the iPhone 16 Pro Max potentially reaching nearly $2,300 (Rs 1,97,000) – up from its current $1,599 ( Rs 1,19,900) retail price.
The impact extends beyond flagship devices—the recently launched iPhone 16e, Apple's more affordable AI-capable phone, could see its price rise from $599 (Rs 59,900) to $856 (Rs 72,200).
Apple had exemptions for China tariffs in Trump’s first terms, and it could approach the Trump for the same this time again
Unlike during Trump's first term, when Apple secured exemptions for several products, no waivers have yet been granted under the new round of tariffs. "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, told Reuters.
Apple's predicament stems from its deeply entrenched Chinese manufacturing base. Even with some production shifted to Vietnam and India, these countries face their own new tariffs at 46% and 26% respectively, leaving few manufacturing havens for the company.
Analysts suggest Apple may struggle to pass the full cost increase to consumers. Angelo Zino of CFRA Research believes the company can only transfer 5% to 10% of the higher costs to buyers, potentially delaying major price increases until the iPhone 17 launch this fall.
With iPhone sales already slowing in major markets and Apple's new AI features failing to drive significant upgrades, the company's bottom line faces mounting pressure.
The situation highlights the vulnerability in the triangular relationship between Apple, China as manufacturer, and the United States as both regulator and major market. With Apple selling over 220 million iPhones annually across global markets, these tariffs could "blow up an American icon...potentially costing the company up to $40 billion," according to Rosenblatt Securities. So, negotiations between Apple, China and the White House are likely forthcoming, and Apple CEO Tim Cook have had a healthy strategic and pragmatic relationship with the US President Trump.
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