Even the most die-hard Apple fan would be hard-pressed to defend the prices of the new iPhones, where the flagship base model is priced at $1,000. With those prices, it has become a lot harder to justify buying a new smartphone every year or every other year, but if you were hoping for prices to drop, you might be disappointed.
According to analysts at JP Morgan, they have suggested that we could potentially see Apple hike up the prices of their future iPhones by as much as 14%. This is done to offset the tariffs that US President Donald Trump could be imposing on goods from China. Given that the iPhone is predominantly made outside of the US, these tariffs could impact the company in a big way.
In a note sent to its clients, JP Morgan wrote, “We estimate a price increase of around 14% is required to absorb the impact of a 25% tariff, keeping margin dollars for all players in the supply chain constant.” Interestingly enough, it seems that the firm also thinks that instead of passing the taxes down to consumers, Apple could be looking to absorb it themselves. We imagine that this is because the company would rather risk having a smaller profit margin than lose customers who might not appreciate the extra $140 tacked onto their next iPhone.
Plus, Apple is probably aware that its pricier iPhones aren’t selling as well as they should. Recent reports have revealed that the cheaper iPhone XR is actually doing a lot better, meaning that raising the price on future iPhones will probably not do the company any favors in the long-run. Either way, we’ll have to wait and see.