In recent years, Apple CEO Tim Cook has been praised on Wall Street for his skill in managing the company’s relationship with the White House. When Cook presented then-President Donald Trump with a shiny gold and glass plaque last month, it was seen as a symbol of his success. Cook had largely navigated the threat of tariffs on Apple’s business by promising an additional $100 billion in U.S. investment, a win Trump could boast about for American manufacturing. However, despite Cook’s efforts, the real costs of those tariffs may finally be passed on to Apple customers.
The Price of a New iPhone
As Apple gets ready to reveal its new iPhone models, some analysts predict the company will increase prices, even after all Cook has done to avoid the worst of the tariffs.
“A lot of the chatter is: Will the iPhone go up in price?” said Jeff Fieldhack, a research director at CounterPoint.
While smartphones haven’t seen significant price hikes yet, other consumer products like apparel, footwear, and coffee have. Tariffs have also hit some electronics, notably video game consoles from Sony, Microsoft, and Nintendo, which have all seen price increases this year.
Some Wall Street analysts are betting that Apple will follow suit. For example, Jeffries analyst Edison Lee has already factored a $50 price increase into his projections for the average selling price of the new iPhone. Similarly, analysts at Goldman Sachs believe that price increases could drive up the average selling price of Apple’s devices over time, especially since the company’s phone lineup has been trending toward more expensive models.
Apple is expected to release four new iPhone models, likely named the iPhone 17 series. Last year’s models ranged from $829 for the base iPhone 16 to $1,199 for the iPhone 16 Pro Max. This year, many supply chain observers expect Apple to replace the less popular Plus model with a new, slimmer device. This new device would trade some features and cameras for a thinner, lighter body, and analysts predict it will cost around $899—similar to the price of the iPhone 16 Plus.
How Cook Has Managed Tariffs So Far
When Trump first announced broad tariffs on China in February, it seemed like Apple was a prime target. Since Apple makes most of its products in China, the tariffs threatened to more than double the company’s costs. However, seven months later, Apple has handled the situation better than many expected.
The U.S. government has repeatedly delayed the most severe Chinese tariffs, and smartphones have been granted an exemption. In May, Cook told investors that the company was able to reorganize its supply chain to import iPhones from India, where tariffs are lower. Cook also successfully used his relationship with Trump, visiting him at the White House and presenting him with the commemorative plaque. This move bolstered Trump’s push for more high-tech manufacturing in the U.S., and in return, Trump said he would also exempt Apple from an upcoming semiconductor tariff.
However, Apple hasn’t completely avoided the consequences. Cook said the company spent $800 million on tariff costs in the June quarter and warned it could spend another $1.1 billion this quarter. After months of absorbing these costs, Apple may finally decide to pass them on to consumers with the launch of the new iPhone 17 models.
A History of Careful Pricing
Apple has been cautious about raising hardware prices in the U.S. For instance, the smaller Pro phone has remained at $999 since its debut in 2017. However, there have been some price adjustments over the years. The company raised the price of its entry-level phones from $699 to $829 in 2020. In 2022, Apple replaced the smaller iPhone Mini with the larger-screen Plus, which cost $899. The Pro Max also saw a price increase in 2023, going from $1,099 to its current price of $1,199.
If Apple does increase prices this year, don’t expect them to blame tariffs. The average selling price of smartphones worldwide has been rising due to the increasing cost of components like camera modules and chips. Instead, Apple will likely focus on highlighting the new features of its phones, such as larger screens, more memory, and faster chips for AI, while quietly noting the new prices.
“No one’s going to come out and say it’s related to tariffs,” said IDC analyst Nabila Popal.
One subtle way Apple could raise prices is by eliminating the lowest-storage version of a model, forcing users to upgrade to a higher-capacity, more expensive option. This is exactly what JPMorgan analysts expect Apple to do with the new Pro model. They predict Apple will keep the prices of the entry-level and Pro Max models the same but will get rid of the entry-level version of the Pro. This would mean users would have to pay $1,099 for a new iPhone 17 Pro, which would have more starting storage than its predecessor.
When Cook was asked about potential price increases back in May, he said he had “nothing to announce.” He added that Apple’s operations team had done “an incredible job around optimizing the supply chain and the inventory.”
What are your thoughts on Apple possibly raising prices?