New US tariffs could add $300 to the cost of the iPhone 16 Pro, analysts warn

Taras Mishchenko - 7 April, 10:00 AM

A new wave of tariffs targeting goods from China could increase the cost of manufacturing Apple's flagship iPhone 16 Pro by hundreds of dollars: according to one estimate, the cost of materials for a 256 GB model could jump from about $550 to $850, The Wall Street Journal reports.

An analysis by TechInsights highlights the potentially far-reaching consequences of the Trump administration’s recently announced 54% tariff on Chinese-made electronics and components. The policy, which aims to shift manufacturing to the U.S., could instead lead to significantly higher consumer electronics prices or a reduction in profits for tech giants like Apple.

Some components of the iPhone 16 Pro have multiple suppliers from different countries of origin, so additional tariffs can significantly increase the cost of the smartphone.

Adrienne Tong/WSJ

According to TechInsights analyst Wayne Lam, the cost of producing a 256GB iPhone 16 Pro, including not only components but also assembly and testing, is currently around $580. With the introduction of new tariffs, this figure could rise to $850, potentially wiping out a significant portion of Apple's margins unless the company raises retail prices above the current $1,100.

The global iPhone supply chain is complex and heavily dependent on China, where final assembly of the devices takes place in huge, highly optimized facilities. Moving even part of that process to the United States, as some in Washington have suggested, would be expensive and logistically difficult.

"It would be a massive, mammoth undertaking that would take years," said Barton Crockett, senior analyst at Rosenblatt Securities. Even if Apple moved final assembly to the U.S., the company would still face tariffs on many imported components, he noted.

In China, assembly labor costs about $30 per smartphone. Lam estimates that in the U.S., that number could jump tenfold to $300. And if Apple were to source and manufacture every component of the iPhone domestically, from OLED displays to NAND memory chips, the total cost could become prohibitively high, making it extremely difficult to produce a competitively priced smartphone.

While Apple and other technology companies await further guidance from the U.S. Department of Commerce, consumers could face price increases or delays on some of the world's most popular gadgets.