All iPhone Price Increase Still More - Trump's Tariff
If you are planning to purchase a new iPhone Xs or any iPhone that are currenlty sold by Apple, then you need to make your decision quick. President Donald Trump has levied 10% tariff on goods imported from China in a motive to make gadgets such as smartphones and laptops in United States. This not only includes the iPhone but also any technology gadgets that are imported from China. Hence, prices of tech gadgets such as smartphones and laptops, particularly it will trigger iPhone price increase.
iPhone is not actually fully manufactured in United States. In every iPhone, you could have found a tagline saying, "Designed by Apple in California. Assembled in China". The components are designed and sent to Apple at China and they assemble the device and are being exported to United States from China. This is the reason why Apple devices are already costlier. When iPhone is sent out globally for sale, the consumer indirectly pays for two import duties. One for importing to United States from China and another import duty is import from United States to the consumer's country. Now after Trump levied the tariff, there will be 10% increase in import duties which result in iPhone price increase.
Apple is already in trouble as the new iPhone Xs is not selling well and the share has already dropped for Apple (APPL). Surprisingly, iPhone Xr which is the budget model of iPhone from Apple sells well. This clearly shows that consumers are very sensitive to price of gadgets. As prices of iPhone have gone beyond the bearable threshold point, consumers are fine buying the budget iPhone.
Apple should do a profit-cut for iPhone Xs to make them sell or they need to increase the price of iPhone and reduce the production of the device, thereby they do not see a loss. Also, Apple has already reported that they will not show the sales reports to the investors. They came to this decision becauase Apple neither grown nor had fall in sales. They were stagnant. Thus, the company decided not to show the reports.
You need to buy iPhone soon if in case you are already planning to buy a one. Apple may increase the price anytime. What is your thought about this Trump's tariff? Share your thoughts in the comments below.