If supplier nations are hit with further tariffs, it could translate into even higher costs for Apple. — Reuters
Tech consumers, including those who use Apple devices like iPhones, are concerned about the effect that President Donald Trump’s tariffs could have on prices of their favorite devices.
Tech users are worried that Trump’s tariffs against China will mean that items shipped to the US from China, including tech devices, will increase in price.
During a recent earnings call with investors, Apple CEO Tim Cook revealed that he believes Trump’s tariffs will increase Apple’s costs by roughly US$900mil (RM3.88bil) for the current quarter, which ends in June, The Street reported.
Cook said that this figure is contingent on tariff rates remaining unchanged.
Cook told investors that one of Apple’s businesses has already been severely affected by the tariffs.
“For China, there was an additional 125% tariff for imports of certain categories of products announced in April,” he said. “And for us, that’s some of our US AppleCare and Accessories businesses, and brings the total rate in China for these products to at least 145%.”
While smartphones and other popular devices are currently exempted from Trump’s reciprocal tariffs, a CNet report said, “If the full cost of current tariffs were passed on to shoppers, we could see anywhere from a 26% hike on Apple products manufactured in India to a 145% increase for those made in China.”
No matter where iPhones are manufactured, Apple continues to source its iPhone components from a number of countries, including Japan and Taiwan.
If these supplier nations are hit with further tariffs, it could translate into even higher costs for Apple.
While it’s unclear when prices could go up, if companies sell out of devices produced before the Trump tariffs took hold, tech firms may have to increase prices on products in tariffed shipments, the CNet report states.
The fact that Cook hasn’t provided an update on any iPhone price increase yet suggests that Apple is still considering the factors and assessing its options.
“Apple will likely absorb some of the tariff costs up front to keep sticker prices stable, then pass the rest on to consumers gradually through service bundles, device longevity and ecosystem upgrades,” said supply chain expert Joe Hudicka. “Consumers will still pay, just not all at once.”
With Apple facing high costs from the tariffs, it seems likely that higher prices are coming, The Street said.
But CNet said that if rising prices do cause demand for tech devices to decline, experts pointed out that Apple and other manufacturers could actually reduce their prices in an attempt to stay competitive. – Staten Island Advance, N.Y./Tribune News Service
