The Price Is Right? How Trump's Tariffs Could Change the Cost of iPhones Forever!

iPhones, alongside other popular gadgets, may soon see skyrocketing prices in the US due to a staggering 145% tariff on goods imported from China under President Donald Trump’s trade policies. This situation has sparked intense speculation among analysts about potential price hikes, with some predicting increases of hundreds of dollars for the next iPhone model.

According to Ben Wood of CCS Insight, raising prices globally could be Apple’s strategy to avoid market discrepancies, so consumers in the UK don’t capitalize on lower prices. An interesting possibility emerges where companies might instead lower prices if they can divert their goods to countries with less severe tariffs, like the UK.

If tariffs remain, we may see changes in how consumers purchase phones, with some firms already offering four-year contracts, suggesting that by 2025, five-year contracts may become the new norm. This shift could feel similar to having a mortgage for a smartphone.

Apple currently relies on China for a hefty 80% of its iPhones intended for the US, leaving the company vulnerable as they attempt to shift production to India and Vietnam. In fact, Apple has recently expedited shipments from India in hopes of mitigating tariff impacts. However, moving manufacturing to the US would require substantial investment and time, with estimates suggesting it could take three years and $30 billion just to relocate 10% of their supply chain.

Analysts like Dipanjan Chatterjee from Forrester suggest that Apple is in a relatively strong position as it may be able to absorb some costs without significant backlash from consumers, given the brand’s loyalty. Yet, estimates of price increases are alarming; some predict the cost of newer models, like the iPhone 16 Pro Max, could jump from $1,199 to as high as $1,999 or more if tariffs are fully passed to consumers.

Interestingly, there’s been a noted rush by customers at Apple Stores, with reports of people buying new devices in anticipation of price escalations. Loyalty to Apple remains strong, but increased prices may lead consumers to reconsider newer devices or even explore second-hand markets, which CCS Insight estimates will grow significantly by 2025. Given the competitive smartphone market, options from Google and Samsung offering similar features at lower costs could become more appealing as consumers weigh their choices. Ultimately, market reactions will become clearer when Apple reveals the pricing for its next iPhone iteration later this year.