Apple’s Dedication To U.S. Manufacturing Would possibly Have Saved Us From Large iPhone 17 Worth Hikes

We have been anxious about the price of the iPhone 17 spiking ever since Trump initiated his new wave of tariffs in April. Since then, we noticed Apple say that tariffs would price it as much as $900 million within the June quarter, and as much as $1.1 billion within the September quarter. The iPhone was not impacted by tariffs, however Trump threatened Apple with 25% tariffs on iPhone imports.

Some experiences indicated Apple needed to extend the costs of the iPhone 17 no matter tariffs, however the firm was anxious in regards to the optics. Different analysts mentioned the 2025 iPhones might cost $50 more than their predecessors. Again-of-the-envelope math utilizing AI indicated Apple might soak up the tariff losses related to different merchandise by increasing the iPhone 17 prices globally by $50.

The primary week of August introduced two huge developments together with it. First, Trump introduced a 100% tariff on semiconductors, or the chips that energy units just like the upcoming iPhone 17 collection. Exemptions can be awarded to corporations that transfer a few of their manufacturing to the U.S. Individually, Apple announced the new American Manufacturing Program (AMP), a part of its $600 billion funding within the U.S. economic system. That determine features a model new $100 billion dedication.

Apple’s huge investments proposed for the subsequent 4 years, mixed with the announcement that a number of key iPhone parts will probably be produced within the U.S., are sufficient for Apple to keep away from the 100% tariffs on semiconductors that may have certainly impacted the iPhone 17 worth. Additionally, contemplating that the AMP program will make sure that key iPhone elements will probably be made within the U.S., it is unlikely for Trump to impose extra tariffs on the iPhone. All that implies the iPhone 17 worth hikes will probably be minimal to non-existent.

Whereas the iPhone 17 collection appears to have prevented an iPhone-related tariff, I nonetheless anticipate minimal worth hikes for this 12 months’s new iPhones. These estimates that mentioned Apple would possibly enhance the costs of some iPhone 17 fashions by as much as $50 make sense in gentle of those developments. Apple may even go for particular worth hikes that do not influence your complete iPhone 17 collection.

The bottom iPhone 17 would possibly nonetheless begin at $799, however Apple would possibly increase the value of the iPhone 17 Air above that of the iPhone 16 Plus, which it will likely be changing. The telephone may cost a little $949 to $999 as a substitute of the anticipated $899 beginning worth. The iPhone 17 Professional costs may additionally get $50 worth hikes. Another choice is for Apple to eradicate the 128GB storage tier from the bottom mannequin. Thus, the 256GB mannequin would be the least expensive iPhone 17 Professional, priced at $1,099. However that is what the present 256GB iPhone 16 Professional prices. The iPhone 17 Professional Max would begin at $1,299 on this situation, like its predecessor. Apple eradicated the 128GB storage tier for the Professional Max fashions in 2023.

This week’s occasions point out that Apple will do something essential to keep away from a extra vital tariff burden that may drive it to move prices to customers. Vital worth hikes throughout its lineup of merchandise would possibly influence income and earnings. The brand new $100 billion dedication to the U.S. economic system and the brand new AMP initiative are higher alternate options to tariffs.

President Trump may also declare victory. The iPhone cannot be made in America, but when a number of key parts are made within the States, it is a win for his administration that seemingly proves tariffs work. In any case, Apple is dedicated to producing key iPhone parts within the U.S. which might be associated to Trump’s nationwide safety coverage. The listing consists of chips, chip-related applied sciences, and uncommon earth magnets.

That mentioned, U.S. manufacturing of iPhone elements and different Apple parts would possibly enhance Apple’s bill-of-material prices for these units within the coming years. Apple has skirted the tariffs for now, however it might need to extend costs anyway to take care of prices associated to American manufacturing. The iPhone 17 collection, with its potential worth hike, is likely to be simply the beginning.