Tech titan Apple is reportedly mulling a move to hike the price of its upcoming iPhone 17 range despite an easing in tariff tension between the U.S. and China.
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Avoiding Amazon Alarm
According to a report in the Wall Street Journal, Apple, whose stock raced 7% higher in pre-market trading, is determined not to blame the price hikes on the impact of tariffs on goods imported into the U.S. from China, where most Apple devices are assembled.
Apple executives reportedly don’t want to be embroiled in a similar controversy to Amazon (AMZN) which was slammed by President Donald Trump’s White House on reports last month that it was considering showing the impact of tariffs on its prices to online shoppers.
As such it is said that Apple is casting around to find other reasons which could be used to explain the price rises such as new features or designs for the new range which are typically launched in the fall.
Apple has been left vulnerable to Trump’s tariffs ever since the president imposed a huge 145% tariff on imports coming into the U.S. from China.
Tariff Headache
As a result, Apple has taken measures such as building up inventory, increasing production in alternative markets such as India and announcing new production investment in the U.S.
However, rising hopes of a trade deal between the U.S. and China over the weekend and the news today of a reduction in most of the tariffs between the world’s two largest economies has buoyed Apple and other major tech stocks.
However, a 20% tariff on Chinese goods imposed by Trump earlier in his term remains in place and covers smartphones. This matters because despite the shift to India the WSJ reported that Apple’s most profitable, high-end phones will continue to be mainly built in China.
According to investment bank Jefferies, of the approximately 65 million iPhones Apple sold in the U.S. last year, around 36 to 39 million were those snazzier Pro or Pro Max models.
The tariffs will therefore, analysts say, lead to higher costs, a hit to profit margins and the need for higher product prices.
At present, its base model iPhone 16 starts at $799 with the iPhone 16 Pro Max costing $1,199 and upwards. That could be about to change.
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