In the US-China trade war, Apple may have to raise iPhone prices or eat the difference

In the US-China trade war, Apple may have to raise iPhone prices or eat the difference
The trade war that President Trump started with China is entering its last phase, it seems, with $500 billion worth of Chinese imports in the US threatened with tariffs in the latest edition. That's basically all the flow of goods between the United States and China, and the world's most profitable phone maker may be among those affected. Last year, there was $45 billion worth of smartphone imports from China, and the vast amount of those were iPhones.

Moreover, if those beyond the Great Wall decide to retaliate, Apple's most profitable App Store region, as well as its best market abroad, could be affected. Granted, there are 1.5 million iOS developers in China, and many more working to assemble iPhones at the Foxconn factories in Shenzhen, who could give the Chinese government a pause should it decide to respond in style.

If the White House decides to go ahead on a standard 10% tariff, an iPhone X's import cost will become over $400, and Apple might have to eat the difference instead of raising prices, as users already showed they are reluctant to pay close to $1000 for a handset already. It's peanuts for Apple, but adds up, and China could ratchet the already high 16% import tax on iPhone in its turn which will squeeze the margins there further. 

Apple's CEO Tim Cook already commented on the matter saying that countries "that embrace openness, that embrace trade, that embrace diversity are the countries that do exceptionally," but we'll see if the White House will listen to thоse business woes.

source: WSJ

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22 Comments

1. cncrim

Posts: 1585; Member since: Aug 15, 2011

it is depend on people pocket, don’t buy if you can’t. We shouldn’t decide for people.

18. sgodsell

Posts: 7028; Member since: Mar 16, 2013

It's not only Apple, but carriers who sell smartphones will have to eat more of the cost in general. So this includes Android smartphones as well.

2. middlehead

Posts: 449; Member since: May 12, 2014

We all know they can afford to take the difference. We all know they won't.

3. apple-rulz

Posts: 1940; Member since: Dec 27, 2016

Why would Apple eat the difference if they don’t have to?

4. drunkenjay

Posts: 1651; Member since: Feb 11, 2013

hope it doesnt affect australia. its expensive already.

5. Papa_Ji

Posts: 812; Member since: Jun 27, 2016

Why you want to stick with overpriced crap even if its hurting your country?

6. NateDiaz

Posts: 1084; Member since: Mar 03, 2018

Cause they earn 10x more than what you earn in your country.

10. Papa_Ji

Posts: 812; Member since: Jun 27, 2016

Even with the 10x Income you can't do/buy what I can in my country. here is an example... INDIA: Unlimited (4g mobile data + calls +text + music subscription + all live TV channels + magazines....) in just 2$. Now imagine what i am talking about???

11. Ozsikhs

Posts: 58; Member since: Sep 03, 2015

$2... WTF That's not true. Rs100 can't buy you all !!

14. Papa_Ji

Posts: 812; Member since: Jun 27, 2016

Gandu 2$ = 69 x 2 = ₹148

15. NateDiaz

Posts: 1084; Member since: Mar 03, 2018

Well you imagine being 10x richer than you're. You're poor tho.

8. drunkenjay

Posts: 1651; Member since: Feb 11, 2013

its overpriced yet if i sell it, i get as much as i bought it for. i also buy it because ios isn't too bad.

13. Papa_Ji

Posts: 812; Member since: Jun 27, 2016

'its overpriced yet if i sell it, i get as much as i bought it for' 2018: iPhone X = 1000$ US OnePlus 6 = 500$ US 2020 : How much you will get for iPhone X. Not more than 400$. Only if it's in perfect condition.You lost $600+ Even if you don't sell 1+6 ... You only lost 500$ + You get better camera Pics, better battery backup and no throttling with time...... I DON'T KNOW HOW YOU GET MORE VALUE FROM X. (iOS is different story)

16. Apoorvtheman

Posts: 47; Member since: Jun 25, 2012

Bro people buy iPhone X for iOS experience and brand value which OnePlus 6 will never match and camera is s**t for OnePlus

19. drunkenjay

Posts: 1651; Member since: Feb 11, 2013

i will never buy one plus 6 garbage. its either samsung or apple for me.

7. opencrownmargin

Posts: 4; Member since: Apr 08, 2014

It’s very simple. Make iphones for China in China. Make iPhones for US in the US and hire US workers with the money saved for not paying the import tax.

22. xfire99

Posts: 1205; Member since: Mar 14, 2012

How are they gonna assemble an iphone without all the components? Do you know where all the components comes from?

17. Alcyone

Posts: 257; Member since: May 10, 2018

Gotta pay, if wanna play. Lots of auto makers that were "domestic" dont even make their autos in the states. Yet, that didn't decrease the cost of them. Simple greed, folks. It's a capitalist country and every company is for making money. Why would Apple be any different?

* Some comments have been hidden, because they don't meet the discussions rules.

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