Apple may be forced to hike the price of its most premium iPhone on the market due to the reciprocal tariffs recently announced by US President Donald Trump on the country’s major trading partners.
The iPhone 16 Pro Max could end up costing $350 more than its current retail price of $1,199 in the US, according to estimates by analysts at UBS. In a note published on Monday, April 7, analysts predicted that the retail price of iPhone units manufactured in China would be increased by nearly 30 per cent.
The iPhone 16 Pro could reportedly see a smaller $120 increase from its current retail price of $999 in the US, but only if the smartphone is manufactured in India.
Since a majority of its smartphone manufacturing takes place in China, Apple is being increasingly perceived as one of the most exposed companies in Trump’s trade war. On April 2, the Trump administration announced a 10 per cent baseline tariff on all imports and higher targeted duties on dozens of countries. While China has been hit with a 34 per cent tariff rate, India’s tariff rate has been set at 26 per cent.
Investors are largely concerned that Trump’s tariffs will force the iPhone-maker to raise prices even as customers’ buying power declines. Nearly $640 billion has been wiped out in Apple’s market cap after its shares plummeted by 20 per cent over the past three trading days.
“Based on the checks we have done at a company level, there is a lot of uncertainty about how the increased cost sharing will be done with suppliers, the extent to which costs can be passed on to end-customers, and the duration of tariffs,” UBS analyst Sundeep Gantori was quoted as saying by CNBC.
PMorgan Chase analysts predicted that Apple could raise the prices of its products sold across the world by 6 per cent to offset the US tariffs. If it doesn’t raise prices, Apple could suffer a 15 per cent cut to earnings per share, as per Barclays analyst Tim Long.
Morgan Stanley analysts said Apple may have to absorb additional tariff costs of about $34 billion annually as countries considered as production alternatives to China could also end up facing tariffs. If Apple passes the costs on to customers, a high-end iPhone could cost nearly $2,300, according to projections from Rosenblatt Securities.
Other analysts predicted that an iPhone could end up costing $3,500 if Apple were to relocate its smartphone production to the US.
