Apple has survived Trump's tariffs so far. It might raise iPhone prices anyway

Recently, Apple CEO Tim Cook presented President Donald Trump with a luxurious gold and glass plaque, a gesture that was well-received on Wall Street as an indication of Cook's adept handling of Apple's relationship with the White House. Analysts praised Cook for navigating the complexities of tariffs, which could have severely impacted Apple’s business. He announced a substantial $100 billion U.S. investment, a move that Trump could leverage to promote American manufacturing. However, despite Cook's efforts, analysts are now speculating that Apple might raise iPhone prices as the company unveils new models this month. "The question on many minds is whether the iPhone will see a price increase," noted Jeff Fieldhack, research director at CounterPoint. Although smartphones have not experienced major price hikes yet, other consumer goods have risen in cost due to tariffs, including apparel and electronics. Notably, major gaming console manufacturers like Sony and Microsoft have already raised their prices in response to tariff impacts. Some analysts are anticipating similar actions from Apple. For instance, Edison Lee of Jeffries has predicted a $50 increase in the average selling price of the upcoming iPhone 17 series. Apple is expected to launch four new iPhone models, likely branded as the "iPhone 17" series. Last year's lineup included the iPhone 16 at $829, the iPhone 16 Plus at $899, and the Pro models starting at $999 and $1,199 for the Pro Max. This year, there are indications that Apple may replace the Plus model with a new, slimmer version that features fewer cameras but a lighter design, potentially priced similarly to the iPhone 16 Plus. As tariffs on Chinese products were imposed earlier this year, Apple appeared vulnerable since a large portion of its manufacturing occurs in China. However, the company has managed to mitigate some impacts by shifting parts of its supply chain to countries like India, where tariffs are lower. Trump's administration has also provided some exemptions, allowing Apple to sidestep certain semiconductor tariffs. Despite these strategic moves, Apple has not escaped the financial ramifications of tariffs entirely. The company reported spending $800 million on tariff-related costs in the last quarter, with projections indicating that this could rise to $1.1 billion in the current quarter. As Apple prepares to unveil its new iPhones, it might consider passing some of these costs onto consumers. Historically, Apple has been cautious about price increases in the U.S. market. For instance, the smaller Pro model has maintained its price since its launch in 2017. Nevertheless, the company has made some adjustments in the past, such as raising the entry-level phone price from $699 to $829 in 2020. If Apple decides to increase prices this year, it's likely they will not directly attribute it to tariffs. Industry experts note that the average price of smartphones globally is on the rise, driven by increasing component costs. Apple is more likely to emphasize the new features of its devices while quietly implementing price changes. Analysts predict enhancements in screen size, memory, and AI capabilities in the new iPhones, which could justify any potential price hikes. Additionally, Apple may consider altering its product lineup by eliminating entry-level versions, which could effectively raise starting prices for consumers. For instance, analysts forecast that the entry-level Pro model may be phased out, necessitating a higher expenditure for consumers seeking more storage. In a recent earnings call, Cook refrained from announcing any specific plans for price hikes but praised his team for optimizing supply chain operations. As the tech giant gears up for the iPhone 17 launch, all eyes will be on how they balance pricing, tariffs, and consumer expectations.