Apple to Increase iPhone Prices Amid U.S.-China Tariff Tensions, Plans New Features to Soften Blow

Apple Inc. is considering raising prices for its upcoming iPhone lineup in response to escalating U.S.-China trade tensions and tariffs imposed by President Donald Trump, according to a report by The Wall Street Journal.

The tech giant, caught in the crossfire of global trade disputes, is navigating a complex landscape of rising costs, supply chain shifts, and competitive pressures, with analysts warning that price increases could jeopardize its market share.

The U.S. has maintained a 30% tariff on Chinese imports, despite a recent agreement to slash some tariffs between the U.S. and China. For Apple, which assembles most of its iPhones in China, these tariffs are expected to add significant costs. The company stated earlier this month that tariffs would increase expenses by approximately $900 million during the April-June 2025 quarter.

To mitigate these costs, Apple is accelerating its shift to manufacturing in India. The company announced it would source a majority of iPhones sold in the U.S. from India during the April-June period, according to Bloomberg. This strategic pivot, however, introduces new logistical challenges, including higher labor and shipping costs, as evidenced by Apple chartering cargo flights to transport over 600 tons of India-made iPhones to the U.S.

Impact of Potential Price Hikes on Consumers

According to the Wall Street Journal report, Apple is planning to couple potential price increases with new features and design changes, such as an ultrathin design, to justify the higher costs.

Analyst projections underscore the scale of potential price hikes. Rosenblatt Securities estimated last month that the base iPhone 16, currently priced at $799, could rise to $1,142 due to tariffs, a 43% increase. Similarly, UBS analysts predicted that the iPhone 16 Pro Max, starting at $1,199, could see a $350 increase, bringing its price to around $1,549, a nearly 30% rise, according to CNBC.

Consumer reactions have already begun to surface, with reports of panic-buying at Apple stores as shoppers anticipate price hikes. CNN on Friday reported an increase in foot traffic at Apple stores, driven by tariff fears.

However, analysts warn that sustained price increases could erode Apple’s market share, particularly as competitors like Samsung capitalize on advanced AI features that Apple has been slower to adopt.

The broader trade environment remains volatile, with tariffs creating what some analysts call a “category 5 price storm” for consumer electronics. Apple’s cautious approach to pricing reflects an effort to balance cost recovery with maintaining consumer goodwill. The company aims to avoid directly attributing increases to tariffs by tying price hikes to new features, a strategy that could help preserve its brand image.

However, Apple’s stock saw a 7% surge in premarket trading on Monday, following the U.S.-China tariff reduction agreement, signaling market optimism about potential relief. However, the persistent 30% tariff on Chinese imports continues to pose a significant hurdle.

A Tech Industry-wide Problem

Apple is not alone in grappling with tariff-related challenges. Amazon faced scrutiny last month when its low-cost Haul unit considered listing import charges due to U.S. tariffs, prompting the Trump administration to accuse the company of a “hostile political act.”

Apple may face the same response from the White House. Trump said on Sunday that he spoke with Apple CEO Tim Cook, without giving details.

However, like many other companies caught in the tariff conflict, Apple faces a delicate balancing act. The company has to choose between raising prices to offset tariff costs, which risks alienating price-sensitive consumers, or maintaining its original prices with squeezed profit margins. The shift to Indian manufacturing, while a long-term solution, introduces immediate challenges that may not fully shield Apple from tariff impacts.