Apple considering a price hike for next iPhone, according to a report by the Wall Street Journal. The company aims to avoid attributing the potential price hikes to U.S. tariffs on Chinese imports, although most of its devices are assembled in China. Despite new tariff reductions, a 30% levy still applies, adding significant costs for companies like Apple. The tech giant has already estimated an increase of $900 million in costs from April through June due to the tariffs. In response, Apple is shifting much of its iPhone production from the U.S. market to India. To offset these added expenses, Apple may introduce new features and an ultrathin design with the next iPhone release to justify a higher price—projected to be up to $1,142, a 43% increase over the current $799 entry price. Although a price hike may help cover increased costs, analysts caution it could result in lost market share to competitors like Samsung, which is actively offering advanced AI features. Apple has not officially responded to Reuters regarding the report.
Apple has been reported to be considering pricing increases in its forthcoming iPhone models, which will launch this autumn. However, Apple plans to not attribute the increase to the ongoing U.S.-China trade wars as reported by The Wall Street Journal. The reason for this is an agreement reached recently between U.S. and China to substantially reduce tariffs for 90 days. While most Apple products are exempt from reciprocal tariffs, iPhones remain subject to a 20% import tax introduced to combat fentanyl trafficking. Despite this, Apple seeks to deflect public perception that tariffs are the cause of any price increases.
Apple CEO Tim Cook recently warned that tariffs could cost the company around $900 million this quarter. In response, Apple has shifted much of its iPhone production for the U.S. market to India and other products like iPads and MacBooks to Vietnam. Still, the high-end iPhone Pro and Pro Max models will continue to be manufactured in China due to India’s limited production capabilities. Apple’s stock saw a more than 5% boost amid broader market gains following these reports. Apple’s upcoming iPhone models could be more expensive than previous versions, according to a Wall Street Journal report. Apple puts these price increases down on the basis of new functions, not U.S. tariffs imposed under the trade policies of President Trump.
Apple is trying to avoid the same backlash Amazon’s Amazon over its claims to highlight cost of tariffs. However, despite their claim, Apple has acknowledged that tariffs would add an additional $900 million to the costs in the present quarter. Most iPhones are manufactured in China, although Apple is attempting to shift some production to India to mitigate tariff impacts. However, Indian facilities cannot currently produce high-end models like the iPhone Pro and Pro Max, making price hikes likely if Apple wants to preserve profit margins. The company has not clarified which new features will justify the higher prices. Meanwhile, news of a 90-day reduction in tariffs between the U.S. and China helped boost Apple’s stock by 5.8% to $209.67 and spurred a 3.7% rise in the Nasdaq Composite index.
Despite a recent partial de-escalation of the U.S.–China trade war, Apple has not fully recovered from losses following the proclamation of “Liberation Day” tariffs by President Trump. While other trillion-dollar tech firms have rebounded with an average gain of 8%, Apple’s stock remains down nearly 7%. The primary reason is that the new agreement only provides a temporary 90-day relief from reciprocal tariffs, creating uncertainty, especially with the next iPhone launch approaching in September. Moreover, Apple still faces up to 30% tariffs on products made in China. Apple is faced with two options to choose from to absorb the cost which could impact its profits or increase the price of its products that could discourage consumers and impact sales of top-of-the-line iPhones. So, the current unstable trade situation continues to present major challenges to Apple.
Apple is working to decrease its dependence on China through expanding production to areas such as India. Recently, the company started making iPhone Pro models in India as a departure from the previous strategy that only produced products that were not Pro-grade. Furthermore, Apple is preparing to make models of the iPhone 17 series in India benefiting from the decision of India to reduce the import charges on important smartphones’ components. However that are only around 25% of Apple’s manufacturing is anticipated move to India at the end of the year. That means the bulk of the devices it makes will be subject to new taxes.
The move to shift an important portion of iPhone shipment out of China into India was motivated by the need to avoid price fluctuations. Analysts predicted that because of the company’s dependence in China, U.S. iPhone costs could rise dramatically. With a tariff of 125 for the most expensive iPhone 16 Pro Max, valued at $1,599 would have a price increase of almost $2,300, as per estimates from Rosenblatt Securities. In contrast, Indian imports faced only a 26% tariff—now temporarily paused for 90 days by President Trump—prompting Apple’s preemptive shipping campaign. To meet this demand spike, Apple ramped up production at its Indian manufacturing partner Foxconn, whose plant in Chennai now operates even on Sundays, traditionally a day off. This move helped Apple hit its target of a 20% production increase. Foxconn’s India factory reportedly produced 20 million iPhones in 2024, including the flagship iPhone 15 and iPhone 16 models. Two sources have confirm that Foxconn’s operations are changed to a seven-day work schedule in order to meet Apple’s deadlines that are accelerated. The shift is an important milestone in Apple’s attempts to broaden its production capabilities to reduce tariff pressures and establish India’s status as a technology manufacturing hub.
The most expensive iPhone 16 Pro Max, due to go on sale in the coming year, may be the primary beneficiary of the taxes. Jefferies believes that a 60 percent tax rate on Chinese components would increase prices of the handset by $256. The figure is just 22% of its cost of sale across the U.S., a cost that is likely to trickle down to the consumer. Jefferies believes that tariffs could cause Apple’s margins fall to 6.7 percent, in extreme conditions. This would lead to a decrease of 10% in Apple’s estimated cash flow discount. Even a less aggressive scenario, where only Chinese-made components are taxed at 60% and other imports at 10%, could still shave three percentage points off gross margins and reduce valuation by 5%. While the potential financial hit isn’t catastrophic, the firm warns that increasing demands for localized production in emerging markets like India and Indonesia could further exacerbate supply chain challenges. Jefferies warns the fact that margins lost due in the process of moving production lines away from China will only increase the difficulties for Apple over the long term. Apple’s efforts to shift production elsewhere like India is unlikely to ease the current pressure on its finances. To date, less than 10 percent of iPhone production is done outside of China which leaves Apple vulnerable to the Trump tariff plans. The tariffs that are proposed could force Apple to take a tough decision: either take on the extra expenses, then pass them along to the consumer, or speed up the diversification of its supply chain which comes at a cost. Some analysts suggest that increasing iPhone costs could result in lower demand, which could further reduce the market share of Apple and its profitability margins.
Apple Inc., which became the first U.S. corporation to exceed the $1 trillion mark earlier this year, can attribute a significant sum of its growth to using China as both a major source of consumer sales and a manufacturing hub. As President Donald Trump continues to ramp up his trade war with China, levies on hundreds of billions of dollars in imports threaten to eat into the Cupertino, Calif.-based iPhone maker’s main business. According to Bank of America Merrill Lynch, if Apple shifted production to the U.S. to avoid new tariffs, as Trump proposed on Twitter, U.S. consumers could be paying 20% more for their devices. In a note to clients on Monday entitled “Handicapping the China trade risk and potential for ramping US manufacturing,” analyst Wamsi Mohan suggested that the most likely scenario is for Apple to shift 10% of iPhone assembly to the U.S., lifting the iPhone average selling price (ASP) by 8%. On Saturday, Trump tweeted that making products in the United States could serve as an “easy solution” to the new tariffs for Apple. His comments on social media came a day after Apple’s letter to U.S. Trade Representative Robert Lighthizer made news, indicating that proposed tariffs on $200 billion worth of imported Chinese goods would negatively impact sales of Apple’s Watch, AirPods, Mac mini, and Pencil products. “The conclusion was for the iPhone.