The next year’s iPhone 8 is widely expected to bring a radical design overhaul. Traditionally, Apple has introduced new features and increased the storage capacity of new iPhones without increasing the price. However, experts believe that the iPhone 8’s bezel-less OLED display and other design changes could push its price higher. And the price tag could go even higher if President-elect Donald Trump goes ahead with his plan to levy heavy tariffs on the import of Made in China goods.
Tariff on Chinese goods could push iPhone 8 prices in the US
Donald Trump had heavily criticized the US trade with China during its Presidential campaign. He promised to bring jobs back to America in an attempt to appeal to manufacturing workers. Trump has threatened to levy a 45% tariff on the import of Goods from China. The iPhone 8 will be the first flagship iPhone to arrive under Trump Presidency. Since most of Apple’s manufacturing takes place in China, Trump’s plans could significantly affect the iPhone 8 pricing.
Though Trump has talked about a 45% tariff, analysts at Barclays believe that he would likely settle on a 15% tariff on Chinese goods. The tariff could force Apple to raise the iPhone 8 prices in the US. The President-elect has also threatened to label China as a “currency manipulator” when he becomes President. Columbia University economist Amit Khandelwal told Business Insider that the prices of goods won’t necessarily rise by 15% if tariffs go up by 15%.
The tariffs are imposed on wholesale price rather than retail price. It’s quite possible that Apple could absorb the cost of tariffs from its own profits, but the Cupertino company rarely compromises on its profit margins. Business Insider estimates that the iPhone 8 price could go up by $97, though $50 would be a more reasonable increase.
China could retaliate
Meanwhile, the Communist Party mouthpiece Global Times has warned that Trump’s move won’t go unnoticed in Beijing. China could retaliate by taxing imports from the US or restrict the sales of US-made goods in the country. China could also limit the number of Chinese students in the United States, noted Global Times. Experts believe that even if Donald Trump can get Apple to make iPhones in the US, the company is likely to staff its factory with robots.
KGI Securities analyst Ming-Chi Kuo said in a research note earlier this week that Apple was planning to launch three different models of the iPhone 8. The 4.7-inch version will feature an LCD display and a single-lens camera, while the 5.5-inch model will come with an LCD display and dual-camera system. There will also be a third version with a 5.8-inch OLED screen and dual-camera setup. The iPhone 8 is rumored to feature wireless charging.
