Apple iPhone 16e
Credit: DH Photo/KVN Rohit
President Donald Trump's sweeping global tariffs have affected the operations of the biggest technology companies based in the United States with some dealing with the woes of taxes on imported goods while other are bound to face supply-chain problems.
Since the inauguration, the combined market value of Amazon, Apple, Google, Meta and Microsoft has fallen 14.6 per cent to $11.3 trillion. And the tech-heavy Nasdaq index is down 15.3 per cent, according to NYT.
Perhaps the biggest blow of the Trump tariffs and the subsequent US-China trade war has been dealt to Apple, which assembles nearly 90 per cent of its iPhones in China.
More than 1,000 components from all over the world go into an iPhone and Apple has manufactured most of its iPhones in China since the first model hit the market 18 years ago.
With the US tariffs now standing at 145 per cent on products made in China, analysts have started predicted how much an iPhone could cost in the coming days, considering that Apple faces paying a hefty sum on any iPhone brought into the US, which is likely to be passed on to consumers in the form of higher prices.
According to a report by The Guardian, analysts at investment bank UBS have warned that the price of an iPhone 16 Pro Max (with 256GB of storage) could rise by 79 per cent from $1,199 (Rs 1,03,048) to about $2,150 (Rs 1,84,781), based on a total tariff of 145 per cent.
Dan Ives, analyst at US financial firm Wedbush Securities has described the Chinese tariffs as a “category 5 price storm for the US consumer”. He has warned that the cost of entirely moving iPhone production to the US would be prohibitive for the company and customers,
Besides, the disincentives for Apple shifting its production domestically include a complex supply chain that it began building in China during the 1990s. Building new plants in the US would take several years and cost billions of dollars.
“The reality is it would take three years and $30 billion in our estimation to move even 10 per cent of its supply chain from Asia to the US with major disruption in the process,” Ives wrote in a note to investors this week. “For US consumers the reality of a $1,000 iPhone being one of the best made consumer products on the planet would disappear.”
Apple has not commented on these developments yet.