There has been considerable discussion regarding how high Apple may increase iPhone prices due to Trump’s tariffs. A recent report from The Wall Street Journal provides an insightful look at Apple’s production costs for the iPhone 16 Pro, and how these costs may be influenced by the tariffs.
Impacts of Trump’s Tariffs on iPhone Pricing
This report references information from TechInsights and iFixit to present a detailed cost breakdown, often termed the bill of materials, for a 256GB iPhone 16 Pro:
- A18 Pro chip: $90.85
- Display: $37.97
- Battery: $4.10
- 5G cellular modem: $26.62
- Memory: $21.80
- Storage: $20.59
- Rear camera assembly: $126.95
- Main casing: $20.79
- Additional components: $200.06
Total before tariffs: $549.73
Total with testing and assembly: $580
It’s important to note that this figure does not include expenses for research and development, marketing, and other non-hardware related costs for Apple. Even when these factors are considered, the WSJ states that “there’s still a healthy profit margin” for Apple.
Currently, Apple retails the 256GB version of the iPhone 16 Pro at $1,099. While these components are sourced globally, the final assembly occurs in China before the devices are imported to the U.S. Trump has instituted a 54% tariff on products coming from China. Apple will incur this tariff based on the total cost of the components rather than the retail price of $1,099 for the iPhone 16 Pro.
When factoring in the 54% tariff, the production cost for a 256GB iPhone 16 Pro rises to approximately $847. This significantly impacts Apple’s profit margins, especially when including additional costs like marketing, research and development, packaging, shipping, and so forth.
This report (available via Apple News+) by Joanna Stern from The Wall Street Journal presents a practical analysis of how Trump’s tariffs will affect Apple’s expenses for the iPhone 16 Pro. Apple has yet to disclose how they intend to respond. It’s highly improbable that the company will absorb the entire 54% tariff. They may mitigate part of the burden, but price hikes for consumers appear unavoidable.
My previous recommendation remains: if you require an iPhone now or foresee needing one soon, it’s wise to purchase sooner rather than later.
My go-to iPhone accessories:
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