Illustrative photo: “American” iPhones could become much more expensive (Getty Images) Author: Vladimir Kostyrin
New tariffs imposed by the administration of US President Donald Trump could radically change the market, and an iPhone made in the US could cost three times as much.
RBC-Ukraine reports this with reference to CNN.
The price of Apple's iPhones could soar to around $3,500 if they are made in the U.S., according to Dan Ives, global head of technology research at financial firm Wedbush Securities.
He told Western journalists that US-made iPhones could cost more than three times their current price of around $1,000. The expert explained that this is due, in part, to the need to recreate the very complex manufacturing ecosystem that currently exists in Asia.
“You build it (the supply chain) in the U.S. in a factory in West Virginia and New Jersey. It's going to be a $3,500 iPhone,” he said, referring to the fab factories, or high-tech manufacturing facilities, where the computer chips that power electronic devices are typically made.
Ives added that even then, moving just 10% of Apple's supply chain to the U.S. would cost about $30 billion and take three years.
Apple's Move to Asia
Smartphone manufacturing and assembly shifted to Asia decades ago as American companies focused more on software development and product design, which were far more profitable.
The move is said to have helped make Apple one of the most valuable companies in the world and cement itself as the dominant smartphone maker.
Tariff fears send Yabloko shares tumbling
Since Trump's inauguration in late January, Apple shares have lost about 25% of their value on concerns about the impact of tariffs on its sprawling supply chain, which relies heavily on China and Taiwan. About 90% of iPhones are assembled in China.
“That's why I think you see what's happened to stocks, because no company is more caught up in this Category 5 storm than Cupertino and Apple,” Ives said.
“Economic Armageddon” and analysts' forecasts
The expert added that “this is economic Armageddon, but especially for the technology industry.”
It also said that the chips that power the iPhone are mostly made in Taiwan, while the display panels are supplied by South Korean companies. Some other components are made in China, with final assembly mostly taking place in the country.
In February, Apple announced it would invest $500 billion in the U.S. over the next four years to expand production outside of China and avoid Trump's tariffs on the country.
Tech analysts agree that iPhone prices are likely to rise even if supply chains remain in place . According to a research note cited by Reuters, New York investment bank Rosenblatt Securities said the iPhone could be 43% more expensive if Apple passes on the full cost of higher tariffs to consumers.
Counterpoint Research vice president Neil Shah estimates that iPhones could cost around 30% more, but that could depend on where they're made .
Apple's attempts to shift production
Apple has previously tried to diversify its manufacturing bases from China to India and Brazil, and could shift production of key components to countries that face lower tariff barriers to lower the cost of phones. India faces tariffs of 26% and Brazil 10%.
While Trump's tariffs on Brazil are the lowest among key iPhone manufacturing hubs, it likely does not produce enough capacity to fill the gap left by China, Shah told Western reporters.
Let us recall that Bloomberg recently wrote that the US could be left without toilet paper due to Trump’s tariffs.
Yesterday, Western media reported that due to the tariff “war” with China, the US may be left without Christmas trees and decorations.
Let's add that it was also recently reported that Americans will be left without new Jaguars due to Trump's tariffs.
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