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US-China trade war could make iPhones 3% more costly

To recoup the same profit on each iPhone sold as before, Apple would need to increase iPhone prices by a similar amount.

tech Updated: May 15, 2019 14:53 IST
Indo Asian News Service
Indo Asian News Service
San Francisco
People walk past the front of an Apple store in central Shanghai on May 8, 2019.
People walk past the front of an Apple store in central Shanghai on May 8, 2019.(AFP)
         

The ongoing trade-war between the US and China has caused Apple’s iPhone production costs to rise as much as 3 per cent because of the new retaliatory tariffs imposed by Beijing.

“Tariffs on the device’s Chinese-made batteries and other components would increase its manufacturing cost by 2 per cent to 3 per cent,” Fortune quoted a Wedbush analyst Dan Ives as telling investors.

To recoup the same profit on each iPhone sold as before, Apple would need to increase iPhone prices by a similar amount.

“The price of an iPhone XS, for example, would rise from $999 to as much as $1,029,” the report said.

According to Ives, Apple’s costs could soar higher if the Trump administration follows through with a plan to add an additional $325 billion in tariffs to Chinese goods. If that happens, iPhones would cost an extra $120 each to produce.

Ives’ estimates are just the latest by analysts about the impact of the U.S.-China trade war, the report added.

On May 10, that fight entered a new phase when President Donald Trump’s administration announced $200 billion in new tariffs on Chinese imports.

In response, China on Monday retaliated by announcing $60 billion in tariffs on US-produced batteries, coffee, and other products. Those tariffs would take effect on June 1.

 

First Published: May 15, 2019 14:53 IST

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