Goodbye to the $999 iPhone? For nearly a decade, Apple has kept the starting price of its top iPhone model at $999. The company adjusted features like storage capacity to maintain that price, but the tag stayed consistent. Now, it may not.
Tariffs are on the horizon. Apple manufactures much of the iPhone in China, where total tariffs will reach 54%—a striking figure that threatens significant price hikes. Apple also manufactures other products in countries such as India (25% tariffs), Vietnam (46%), Malaysia (24%), Thailand (37%), and Indonesia (32%). Price increases appear virtually inevitable.
Here’s what it currently costs to make an iPhone. According to The Wall Street Journal, the 256 GB iPhone 16 Pro has a “bill of materials” cost of $550, based on data from analyst Wayne Lam of TechInsights. Assembly and testing raise the total to $580.
And here’s what tariffs could add. Due to the new tariffs on products imported from China, the iPhone’s production cost would jump by 54%, bringing the $550 figure up to $850. That difference is significant, and Apple may have to break with tradition and raise the starting price of its flagship devices.
No easy solutions—and none in the short term. Trump’s continued focus on tariffs likely means potential negotiations will stall. Apple could move iPhone production to the U.S., but it can’t do that overnight and would need to adjust prices globally.
Manufacturing in the U.S. would cost far more. Relocating production to the U.S. wouldn’t guarantee a solution. Lam says the labor to assemble a phone for $30 in China could cost $300 in the U.S. If every component increases in cost, the final price could become prohibitive for many. Some have begun discussing iPhone subscriptions as a possible alternative.
If prices must rise, Apple won’t hesitate. Apple hasn’t shied away from raising prices in the past. It did so in Japan in 2022 when the yen weakened significantly. That same year, inflation also pushed product prices higher. In all cases, users end up bearing the cost.
The iPhone is a clear example of what’s to come. The iPhone’s rising manufacturing cost is a clear—and troubling—example of what could happen to any consumer product made in China and sold in the U.S. While the issue may seem isolated, it has global consequences. If Apple or any other company raises prices due to tariffs, they’ll likely adjust pricing in every country where they sell their products.
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