Back in February, Apple pulled a bold move. They committed $500 billion to build in America, and the Trump administration is counting on this to boost domestic manufacturing for infrastructure. In spite of this move, the company continues to produce the overwhelming majority of its iPhones in China. That answer begs the question as to how continuing tariffs will harm consumers. At the moment, China produces 80% of the iPhones they sell here in the US. At the other end of the spectrum is India, which makes up the other 20%. The US has inflicted a painful 125% tax on Chinese imports. Industry analysts are already guessing as to the effect this will have on iPhone pricing.
Apple’s iPhones dominate the US smartphone industry. As Counterpoint Research points out, these devices accounted for more than half of all smartphone sales last year. Second, this enviable market position leads to serious questions about the impact on consumer choice of any proposed price increase or decrease. Apple has yet to publicize what it plans to do about tariff costs. If the company chooses to do so, prices may increase substantially, analysts warn, by passing those costs on to consumers.
When measured against other smartphones, the price of the iPhone is already quite high. However, competing brands like Google and Samsung have released devices with similar features at lower price points. Should Apple decide to transfer tariff costs to consumers, analysts estimate that iPhone prices in the US could increase by hundreds of dollars. One forecast even estimates that prices would more than triple if all goes well. This would move already affordable models too far out of reach for millions of consumers.
For instance, investment banking firm UBS projected that the cost of a China-made iPhone 16 Pro Max with 256GB storage would soar from $1,199 to $1,999. In mid-December, industry analyst Dan Ives provided a chilling prediction. He estimated that a “Made in USA” iPhone could jump to a staggering $3,500 if tariffs completely reached the retail level.
In reaction to these complications, Apple set up chartered cargo flights to deliver more than 600 tons of iPhones from India to the US. This controversial move highlights Apple’s larger innovation strategy of supply chain diversification and reducing reliance on China. India and Vietnam have recently established themselves as promising alternatives for more complementary manufacturing hubs in recent years.
Yet even with these initiatives, experts warn that moving U.S. production out of Asia won’t be easy. To emphasize his point, Dan Ives said even moving 10% of the supply chain from Asia to the US would need three years. He had calculated that this change would be roughly $30 billion and deliver significant disruption in the process.
Regarding brand loyalty, analysts are at odds over how consumers would respond to higher prices. Dipanjan Chatterjee remarked on Apple’s strong consumer loyalty: “The brand commands better loyalty than its competitors, and it is unlikely that a manageable price increase will send these customers fleeing into the arms of Android-based competitors.”
As the debate over tariffs and a domestic manufacturing base heats up, there’s no clear way forward for Apple. The company’s significant investment in the US signals a long-term commitment to domestic production but raises pressing questions about pricing structures and consumer accessibility in an increasingly competitive market.