May 14, 2019

IPhone prices may skyrocket with US-China war

The trade dispute between the US and China could become damaging to Apple, increasing the cost of iPhone and reducing the stock price.


The era of cheap labor from China for US companies may be at stake. According to a report by Morgan Stanley, Trump's new 25 percent tax on the $ 200 billion Chinese product coming into the US could increase by about $ 160 ($ 142) at the cost of a manufactured XS iPhone in China.

Currently the official price is 999 dollars, 1179 euros in Portugal.

Unlike Samsung, which has factories in Vietnam, China, India, Brazil, Indonesia and Korea, Apple uses a Chinese factory chain for all its products, from iPhone, iPad, Mac computers.

Apple is increasing efforts to shift some of the production out of China.

Trump asked Monday that US companies operate outside of China, preferably in the United States. But for Apple, pulling out of Hon Hai Precision Industry, a division of giant FoxConn, would be a long and difficult affair, analysts say.

According to Gene Munster, an analyst at Loup Ventures, Apple has already considered transferring some of the production to India or Brazil. But while it might create a B plan for suppliers, it would be much harder to build assembly processes in new plants quickly.

"Apple is exploring all the options and this change will be somewhat slow because the company does not have a reliable alternative alternative at this time to produce their phones," Munster told The Guardian.