Following the Trump administration’s “Liberation Day” tariffs, OEMs like Apple are looking into initiatives to lessen the blow to consumers with the inevitable price hikes. China, where the bulk of iPhones are assembled, is hit with a combined 54% tariff, India faces a 26% levy, while all goods from Vietnam will get a 46% import fee upon entering the U.S.
According to Bloomberg’s Mark Gurman, Cupertino has been stockpiling inventory of iPhones, Macs, and other products in the U.S. for months in anticipation of the new tariffs. The newly announced levies which go into effect on April 9 will not apply to devices that are already on U.S. soil and Apple could theoretically hold off on raising iPhone prices until the iPhone 17 series in September.
Apple is also prepared to absorb a small percentage of the cost by limiting its margins on hardware. On average, Apple products feature a 45% markup on hardware alone. Like other companies, Apple is also reportedly renegotiating its contracts with supply chain partners and manufacturing partners in order to get better pricing for device components and assembly.
In addition to these factors, Apple is also expanding its global manufacturing facilities to new areas with Brazil being reported as one of the new additions.
It’s been over seven years since Apple last increased the price of its flagship iPhone in the U.S. with 2017’s iPhone X starting at $999. Unless we see a huge turnaround on the geopolitical side of things, be prepared for a solid markup on the next generation of iPhones.
Source (paywall)
