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Apple Faces Pricing Challenges Due to New Tariffs Announced by President Donald Trump

With the base iPhone 16 currently priced at $799, estimates suggest it could increase to as much as $1,142.

The iPhone 16 Pro Max, originally retailing for $1,599, might see prices soar to nearly $2,300.

The cost of your next iPhone may be set to rise significantly in the United States. In light of the newly imposed tariffs by US President Donald Trump, Apple may be compelled to adjust its iPhone pricing. Analysts predict this increase could range from an alarming 30 percent to 40 percent.

The crux of the issue lies in the fact that a majority of iPhones are still produced in China, which has recently faced an unexpected and steep 54 percent tariff. As long as these tariffs remain in effect, Apple will be left with a choice: absorb the additional costs or transfer them onto consumers, as stated in a report by Reuters. This scenario could lead to a considerable price increase for upcoming iPhone models.

The base model iPhone 16 is currently available for $799 in the US market. However, should Apple decide to pass along the entirety of these increased tariffs to consumers, prices could potentially soar to $1,142. Similarly, the high-end iPhone 16 Pro Max, priced at $1,599, may climb to an astonishing nearly $2,300 following a hefty 43 percent price increase, according to projected estimates from Rosenblatt Securities.

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“This entire China tariff situation is evolving in a manner we did not anticipate; we expected Apple, as an American icon, to be shielded as it was previously,” remarked Barton Crockett, an analyst at Rosenblatt Securities, in the report.

With more than 220 million iPhones sold annually, the US stands as one of Apple’s key markets. A steep price increase could significantly impact their sales figures. Experts also point out that Apple’s latest features — including capabilities like email rewriting, notification summarization, and integration with ChatGPT — have yet to stimulate sufficient consumer interest to foster robust demand.

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Some analysts maintain that Apple may find it difficult to impose price increases exceeding 5 percent to 10 percent without facing potential declines in sales. “We predict Apple will postpone any significant price hikes until this fall when the iPhone 17 is scheduled to launch, as this is generally the strategy they employ for planned price adjustments,” stated Angelo Zino from CFRA Research.

While Apple is actively shifting portions of its manufacturing to nations like Vietnam and India to mitigate tariff impacts, both of these alternatives are also subject to tariffs of 46 percent and 26 percent respectively. This reality complicates Apple’s efforts to sidestep the ramifications of these tariffs.

“Based on our preliminary calculations regarding Trump’s tariff implementation, the potential financial fallout for Apple could be disastrous, reaching up to $40 billion,” noted Crockett.