1 week Ago By Varun Godinho
Apple which has heavily relied on manufacturing in some of the Asian countries hit hardest by President Donald Trump’s ‘Liberation Day’ tariffs, has seen its share price plunge more than 13% as fears grow that it will not be able to absorb the tariff costs and will end up passing them on to their customers. Estimates suggest that iPhone prices in the US could climb by up to 43% to offset the tariffs. As Apple diversified its production away from China over the last few years, it shifted some of its iPhone production to India, AirPods to Vietnam and Mac desktops are assembled in Malaysia.
India now has a 26% tariff, Taiwan is at 32%, Vietnam received a 46% tariff setback, and Malaysia faces a 24% tariff. China is now at a 54% tariff rate. Rosenblatt Securities’ analysis suggests that an iPhone 16, priced at $799 (A$1,307) in the US, could jump to as much as $1,142 (A$1,868) and an iPhone 16 Pro Max could climb from $1,599 (A$2,616) to $2,300 (A$3,763).
American companies usually adjust their global product pricing in relation to their product’s US prices, which means that iPhone prices in Australia could rise sharply too. Some media reports, including one from Reuters, has indicated that an increase in iPhone prices could dampen demand for it giving Samsung Electronics, which faces lower US tariffs overall due to its current manufacturing geographic distribution, a possible competitive edge. However, a Samsung Electronics official was reported by The Korea Herald as saying, “While we may gain market share, it remains to be seen whether it will be beneficial in terms of overall profitability.
” In 2024, worldwide smartphone shipments increased 6.4% year-on-year to reach a total of 1.24 billion units, according to research firm International Data Corporation (IDC).
Apple was the leading smartphone supplier and shipped a total of 232.1 million units (down 0.9% year-on-year), followed by Samsung with a total of 223.
4 million units (a decline of 1.4% year-on-year). CFRA Research equity analyst Angelo Zino added, “Apple will have a tough time passing on more than 5% to 10% of the cost to consumers.
We expect Apple to hold off on any major increases on phones until this fall when its iPhone 17 is set to launch, as it is typically how it handles planned price hikes.”.
