Apple’s bestselling device, the Apple iPhone, is the product of a globally distributed supply chain. Components are sourced from multiple countries and the final assembly happens in China, where high-tech manufacturing has been honed to perfection. With President Trump’s new 54% tariff on imports from China, this model is now under economic threat. Bringing Apple iPhone assembly to the U.S. might sound patriotic, but it’s far from practical. According to analysts at TechInsights, assembling an Apple iPhone 16 Pro in China costs Apple roughly € 550 in materials and another €30 for labour. Moving the same process to the U.S. could increase labour costs tenfold, making the total far less competitive.
Tariffs shrink Apple’s profit margins
With the new tariffs, Apple’s cost per unit jumps to approximately € 790. That leaves little room for profit unless retail prices rise. Rosenblatt Securities estimates the Apple iPhone 16's price could soar from € 740 to € 1,060. The high-end Apple iPhone 16 Pro Max with 1TB storage could leap from € 1,480 to a staggering € 2,130.
Apple faces pressure from all sides
While some analysts believe Apple may pass the cost onto consumers, others argue the company cannot justify a 43% hike amid lukewarm interest in its AI efforts. CFRA Research suggests a more modest increase of 5% to 10% may be all that’s feasible in the current market.
Consumers urged to keep phones longer
Amid ongoing uncertainty, analysts recommend that consumers delay upgrading and instead prolong the use of their current devices. Apple has yet to determine whether it will absorb the impact of tariffs or shift production—a complex, years-long endeavor—leaving the final cost of an iPhone unclear. SecondaryMarket.news previously reported that Trump’s tariffs could disrupt the global secondary market by straining supply chains. As a result, fewer devices may be traded in, making used and refurbished products even more appealing to consumers. This rising demand, paired with limited supply, is expected to drive up prices in the secondary market. With trade-ins declining and availability shrinking, the value of pre-owned devices will likely rise, reinforcing the importance of sustainability and long-term device use in today’s tech landscape.
Via: WSJ.com
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