The United States government, under President Donald Trump, has introduced a set of extensive tariffs affecting various nations, which could significantly reshape global trade dynamics. Analysts expressed concerns on Thursday that consumer-facing products such as iPhones might experience substantial price increases, ranging from 30 percent to 40 percent, should Apple choose to transfer these costs to consumers.
Currently, the majority of iPhones are manufactured in China, which is subject to a 54 percent tariff under these new regulations. This situation presents Apple’s leadership with a challenging decision: either absorb the additional costs themselves or pass them onto the buyers.
Following the announcement, Apple’s stock plummeted, resulting in a 9.3 percent decline—its steepest drop since March 2020.
Apple’s annual sales exceed 220 million iPhones, with significant markets including the United States, China, and Europe.
The entry-level iPhone 16 was launched at a price point of $799 (approximately Rs. 68,084) in the United States, but analysts at Rosenblatt Securities have projected that it could increase to around $1,142 (approximately Rs. 97,312) if Apple opts to adjust prices based on the new tariffs.
For higher-end consumers, the iPhone 16 Pro Max, which features a 6.9-inch display and one terabyte of storage, currently retails at $1,599 (approximately Rs. 1,36,254). With the projected increase, its price could rise to nearly $2,300 (approximately Rs. 1,95,988).
During Trump’s previous term, tariffs were levied on a variety of Chinese imports, aiming to encourage U.S. companies to relocate manufacturing to domestic facilities or nearer locations such as Mexico. However, Apple had previously benefited from certain exemptions. Thus far, in the current context, no such exemptions have been granted.
“The ongoing situation regarding China tariffs is playing out in a manner that contradicts our expectations for an American titan like Apple to be treated with leniency, as was the case previously,” noted Barton Crockett, an analyst at Rosenblatt Securities.
Additionally, the affordable iPhone 16e, introduced this February as an economical option to access Apple’s suite of artificial intelligence features, is priced at $599 (approximately Rs. 51,042) but could see an increase of 43 percent, bringing it to $856 (approximately Rs. 72,940). Other Apple devices are also likely to see similar price escalations.
Apple has not commented on these developments. Many customers typically finance their phones over two to three years through cellular provider contracts.
Nevertheless, analysts have pointed out that iPhone sales have been struggling in key markets. The introduction of Apple Intelligence, designed to streamline notifications and enhance email functionality, has yet to generate significant enthusiasm among consumers.
Expert evaluations indicate that while these features are innovative, they do not offer sufficient incentives for users to upgrade to newer models.
The slowdown in consumer demand could place further strain on Apple’s financial performance, especially if operating costs rise due to the tariffs.
Angelo Zino, equity analyst at CFRA Research, highlighted the challenges Apple may face in transferring more than 5 percent to 10 percent of the costs onto consumers.
“We anticipate that Apple will refrain from implementing major price increases on their products until the launch of the iPhone 17 this fall, as has been their customary approach,” Zino stated.
Even with some manufacturing shifting to countries like Vietnam and India, a large portion of iPhones is still produced in China, which remains affected by tariffs—Vietnam faces a 46 percent levy, while India’s is set at 26 percent.
According to Neil Shah, co-founder of Counterpoint Research, Apple would need to increase prices by a minimum of 30 percent on average to counterbalance the new import duties.
A steep price increase could potentially diminish demand for iPhones, thus granting a competitive advantage to South Korea’s Samsung Electronics, which experiences lower tariffs than those imposed on Chinese imports where all U.S. iPhones are manufactured.
“Our analysis of ‘Trump’s Tariff Liberation Day’ suggests that this could severely impact Apple, potentially resulting in losses up to $40 billion (about Rs. 3,40,850 crore),” Crockett remarked, indicating forthcoming negotiations between Apple, China, and the White House.
“It’s difficult for us to envision Trump influencing the fate of an American icon negatively… but this scenario appears quite challenging,” he added.
© Thomson Reuters 2025
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