Apple is considering raising prices on new iPhones due this fall, but the Cupertino company wants to avoid scenarios where the price hikes are justified by Donald Trump's tariffs on China, The Wall Street Journals reports.
Although China and the US have agreed to mutually suspend tariffs imposed in early April, the 20% tariffs imposed by Donald Trump at the start of his second term remain in place. This could still affect the new iPhones, which will also feature additional design and form factors.
Apple began stockpiling devices in March, well before the tariffs were imposed. The company has also shifted production of new iPhones to India, where most of its smartphones now come from. However, production of flagship models — such as the Pro and Pro Max — will remain in China due to the complexity of the processes, according to people familiar with Apple’s supply chain.
Of the roughly 65 million iPhones Apple sells in the U.S. in 2024, about 36 million to 39 million will be Pro or Pro Max models, according to investment bank Jefferies. Sources familiar with the matter said the company will struggle to offset the cost of Chinese tariffs, which could hit profits. At the same time, the company is reluctant to blame the price hike on tariffs, lest it sour relations with Donald Trump.
While the company is looking for reasons other than tariffs to raise prices, the new features and changes in future iPhones may be too small a change to justify them. Another option is to move iPhone production to the US, but that process could take years and won't help in the short term, during which Apple could lose $900 million.