The iPhone is one of the most popular smartphones in the world, but have you ever wondered how much it costs Apple to make one? Surprisingly, the price you pay in the store is much higher than what Apple spends to build it. However, things might change if a new US tariff policy is implemented, which could directly affect iPhone prices in the market.
How Much Does Apple Spend to Make an iPhone?
According to a report by The Wall Street Journal, the cost of making the iPhone 16 Pro (256GB) is around $580, which is roughly Rs. 50,000 in Indian currency. This cost includes:
- A18 Pro chip – $90.85
- Rear camera system – $126.95
- Display panel – $37.97
- Other internal parts, frame, and battery – Remaining cost
This phone is sold in the US for $1,099 (approx.. Rs. 91,000), which means Apple earns a significant profit even after expenses like marketing, research, software development, packaging, and distribution.
What’s the Tariff Issue?
Former US President Donald Trump has proposed a 54% tariff on goods imported from China, and this policy might be implemented again if he returns to office. Now, here’s the tricky part: iPhones are assembled in countries like China and India, but many of the parts come from all around the world. The proposed tariff would apply to products made in China, which includes most iPhones.
If the full tariff is applied, the cost to make the same iPhone 16 Pro could go up from $580 to about $847—almost Rs. 73,000. That’s a big jump in the production cost. And Apple, being a business, is unlikely to bear the full cost on its own.
Will iPhone Prices Go Up?
There is a strong chance that Apple may pass on some of this extra cost to buyers. For example, if you currently buy an iPhone for Rs. 80,000, it might go up to Rs. 95,000 or even more.
Apple has to maintain its profit margins and also manage increasing costs, so price hikes are likely if the tariff is imposed. The company could adjust pricing differently in different markets, but eventually, some impact might be seen in India as well.
Can Apple Move iPhone Production to the US?
This idea has been discussed before. But making iPhones in the US isn’t practical right now. The labour cost in China to assemble a phone is about $30, while in the US it would be over $300 per unit. This tenfold increase would make the final product far too expensive, especially in global markets where price plays a huge role.
Although Apple has slowly increased its manufacturing activities in India, a full shift from China is not easy. The supply chains, skilled labour, and component ecosystems are still strongly based in China.
What’s Next for Buyers?
If the tariff is approved and applied, new iPhone models could become more expensive globally. Whether Apple absorbs some cost or passes it entirely to customers remains to be seen. But one thing is certain—iPhone prices are closely tied to international trade policies, and even small changes in global economics can lead to big changes in retail pricing.
Buyers in India and other countries should keep an eye on these developments, especially if they’re planning to upgrade to a new iPhone in the near future.
