Apple’s Tariff Tradeoff: Raise Phone Prices or Suffer Margin Hit →
Mark Gurman, for Bloomberg:
In late November, Trump told the Wall Street Journal he might impose tariffs on mobile phones and laptops, and said consumers “could stand” a 10% increase in prices “very easily” […]
I’m sure that “said consumers” completely agree with Trump.
A $1,249 iPhone XS Max with 256 gigabytes of storage has $453 worth of parts, according to TechInsights. A 25% levy on that would be $113, raising the purchase price by about 9%. Apple’s other models, the iPhone XS and the iPhone XR, could face a similar increase, according to estimates. In a recent note to investors, Morgan Stanley estimated that a $999 iPhone XS would cost $160 more. JPMorgan analysts forecast a 14% price increase […]
If Apple passes the whole tariff cost to U.S. consumers, demand could drop by 10% to 40%, Cowen’s Sankar estimated on Tuesday. That, in turn, may slice earnings per share by 1% to 4% in fiscal 2020, the analyst said.
So, Apple could “very easily” lose between 10% and 40% in new iPhone sales. I guess that means that the free 5 GB iCloud tier isn’t going up in size anytime soon.