- By Prateek Levi
- Fri, 04 Apr 2025 12:54 PM (IST)
- Source:JND
iPhone Price: US President Donald Trump is on a spree of imposing taxes, on various countries around the globe and this could bring some bad news for iPhone fans as these tariffs could hike the price of consumer goods like iPhones, which could be amongst the products that is most drastically hit, according to analysts. This could mean that the iPhones could come with a 30%-40% price hike if the cost is passed on to the end consumer.
China, which is the production hub for most iPhones, was hit with a 54% tariff. If these duties continue to exist, Apple would be in a limbo and would have to make a difficult decision of either absorbing the costs or passing it down to the final consumer.
On Thursday, the company's shares had one of their worst days since March 2020, closing down 9.3%.
The Cupertino-based tech giant sells more than 220 million units of iPhones each year, and the United States, China and Europe are its biggest markets.
The base model of the iPhone 16 launched in the U.S. with a starting price of $799, but according to projections from analysts at Rosenblatt Securities, it could end up costing as much as $1,142—a 43% increase—if Apple passes the added costs onto consumers.
Meanwhile, the higher-end iPhone 16 Pro Max, which features a 6.9-inch display and 1TB of storage, currently sells for $1,599. If the same 43% price hike were applied, its cost could climb to nearly $2,300 (Rs 1,96,025! Approx).
During his first term as president, Donald Trump imposed a myriad of tariffs on imports from China, in order to pressurise U.S based companies to either bring back the manufacturing to the homeland or contries situated nearby, such as Mexico. Apple secured exemptions or waivers for several products in the past. However, this time, no exemptions have been granted yet.
"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, an analyst at Rosenblatt Securities, stated in a note.
We have recently seen the launch of Apple's so called affordable iPhone the iPhone 16e, which came with Apple ntelligence, and was priced at $599, this means that if the tariff imposition continues the same device with a 43% price hike could cost $856. This would in turn affect other Apple products as well.
Apple did not immediately respond to a request for comment. Many customers purchase their phones through instalment plans spread over two to three years via contracts with their cellular providers.
However, some analysts have pointed out that iPhone sales have been struggling in key markets. One major factor is Apple Intelligence—a suite of AI-driven features designed to summarize notifications, rewrite emails, and integrate ChatGPT—which has failed to generate significant excitement among buyers.
Expert reviews acknowledge the features as innovative but suggest they don’t offer a strong enough incentive for most users to upgrade. This stagnation in demand could add further pressure on Apple’s bottom line, particularly if tariffs drive up costs.
Angelo Zino, an equity analyst at CFRA Research, said the company will likely struggle to pass more than 5% to 10% of the cost onto 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 though there has been some distribution of production to other countries like Vietnam and India, the majority of production is still concentrated in China. Nonetheless, the other countries are not being spared from these duties either, as Vietnam faces a 46% levy and India comes in at 26%.
Apple would need to increase prices by at least 30% on average to offset import duties, according to Counterpoint Research co-founder Neil Shah.
Such a steep price hike could weaken demand for the iPhone and give South Korea’s Samsung Electronics an advantage, as the company faces lower tariffs than China, where all iPhones sold in the U.S. are manufactured.
"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 emphasised, 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."
(Information for this article was sourced from Reuters)
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