The WSJ Estimates the Effect of Trump’s Tariffs on the iPhone
Joanna Stern, Adrienne Tong, and Nicole Nguyen, writing for The Wall Street Journal (News+): Take a look at this iPhone 16 Pro. Your cost, for the 256GB version, is $1,100. The cost of all the hardware inside — aka the bill of materials — was about $550 to Apple when the phone was introduced, says Wayne Lam, research analyst at TechInsights, which breaks down major products. Throw in assembly and testing and Apple’s cost rises to around $580. Even when you account for Apple’s advertising budget and all the included services — iMessage, iCloud, etc. — there’s still a healthy profit margin. Now factor in the newly announced tariff for goods from China, which currently totals 54%. The cost rises to around $850. That profit margin would shrink dramatically if Apple didn’t up the price. And you don’t become a trillion-dollar gadget company by charging for things at cost. Also worth a look is today’s front page of the WSJ print edition. At least they picked a flattering photo of Trump. ★
Joanna Stern, Adrienne Tong, and Nicole Nguyen, writing for The Wall Street Journal (News+):
Take a look at this iPhone 16 Pro. Your cost, for the 256GB version, is $1,100. The cost of all the hardware inside — aka the bill of materials — was about $550 to Apple when the phone was introduced, says Wayne Lam, research analyst at TechInsights, which breaks down major products. Throw in assembly and testing and Apple’s cost rises to around $580. Even when you account for Apple’s advertising budget and all the included services — iMessage, iCloud, etc. — there’s still a healthy profit margin.
Now factor in the newly announced tariff for goods from China, which currently totals 54%. The cost rises to around $850. That profit margin would shrink dramatically if Apple didn’t up the price. And you don’t become a trillion-dollar gadget company by charging for things at cost.
Also worth a look is today’s front page of the WSJ print edition. At least they picked a flattering photo of Trump.