Tech giant Apple is reportedly weighing a plan to increase prices for its upcoming iPhone 17 models set to release this fall, according to people familiar with the matter. The company aims to pair these potential price hikes with new features and design changes rather than attributing them to U.S. tariffs on goods imported from China where most iPhones are manufactured.
The Wall Street Journal first reported on Monday that Apple wants to avoid linking any price increases directly to tariffs, instead focusing on new design elements like the rumored ultra-thin iPhone 17 Air model as justification for higher prices. This strategy comes after the White House recently criticized Amazon for considering showing the impact of tariffs on consumer prices, calling it a "hostile political act."
The news emerged on the same day the United States and China announced a temporary 90-day reduction in reciprocal tariffs. Under the new agreement, the U.S. will lower tariffs on Chinese goods from 145% to 30%, while China will cut its levies from 125% to 10%. However, a 20% tariff implemented by President Trump earlier this year on Chinese imports, including smartphones, remains in place.
"The people familiar with the supply chain said Apple would have trouble making up for China tariff costs solely by seeking further savings from its suppliers, meaning a hit to its profit margin was likely unless it could raise prices," the Wall Street Journal reported.
Apple CEO Tim Cook has taken steps to mitigate tariff impacts by shifting more iPhone production to India. During the company's latest earnings call, Cook indicated that Indian-made iPhones are expected to account for the majority of devices shipped to the U.S. in the second quarter. He also revealed that Apple expected current tariff policies to generate $900 million in additional costs this quarter alone, with higher expenses projected to continue if tariffs aren't reduced further.
Despite these efforts, sources familiar with Apple's supply chain suggest that the company's most profitable Pro and Pro Max models will continue to be manufactured primarily in China, as facilities in India aren't yet equipped to support mass production at the same scale.
Analysts have previously estimated that if Apple were to pass on the full cost of tariffs to consumers, prices could increase dramatically. CFRA Research analyst Angelo Zino suggested the company might struggle to increase consumer costs more than 5% to 10%, while more pessimistic projections from Rosenblatt Securities indicated Apple would need to hike iPhone prices by as much as 43% to fully offset tariff costs.
The potential price increases come at a time when Apple's stock has been negatively impacted by trade tensions. Shares plummeted nearly 20% after Trump's tariff announcements in early April, wiping out nearly $640 billion in market value. However, following Monday's news of reduced tariffs, Apple's shares rebounded, rising 7% in premarket trading.
Apple has not commented publicly on the reports of planned price increases. The company typically unveils its new iPhone models in September, giving executives several months to finalize pricing decisions as they monitor the evolving trade situation and market conditions.
Current iPhone models range from the base iPhone 16 starting at $799 to the iPhone 16 Pro Max at $1,199. The upcoming iPhone 17 lineup is rumored to include significant updates, including an all-new ultra-thin iPhone 17 Air that would replace the Plus model in Apple's lineup, as well as increased RAM to support new artificial intelligence features.
Sources: The Wall Street Journal, Reuters, Fox Business, MacRumors, Bloomberg, CNBC
