The manual assembly cost in the United States is 10 times that of China, and Apple could lose $33 billion each year.

According to The Times of India on April 7, Apple used five fully loaded flights to transport iPhones and other products from India to the United States in just three days from March 27 to March 29. This move by Apple was an emergency measure to avoid the 10% "reciprocal tariff" that took effect in the U.S. on April 5.

Sources said that Apple is rapidly transferring inventory from manufacturing hubs in India and China to the U.S. during this transportation off-season to counteract the impact of the tariffs. He revealed that Apple currently has no plans to raise retail prices in India or other markets. Instead, Apple is maintaining pricing by building up stock. It is reported that Apple's U.S. warehouses have already stocked up on inventory for the next few months.

Research analyst at TechInsights stated that the cost of a 256GB iPhone 16 Pro, including approximately $30 (about RMB 220) for assembly and testing costs, is about $580 (about RMB 4250). If the 54% tariff on Chinese goods imposed by the U.S. is added, the cost will rise to around $850 (about RMB 6229), significantly reducing profit margins. Morgan Stanley predicts that the tariff costs could result in losses of up to $33 billion annually for Apple.

Analysts at Rosenblatt Securities estimate that if Apple passes the cost onto consumers, the price of the current cheapest model, the iPhone 16, in the U.S. may increase by 43%, rising from $799 (about RMB 5856) to $1142 (about RMB 8369). For the more premium iPhone 16 Pro Max 1TB version, currently retailing at $1599 (about RMB 11,700), the price after passing on the cost may approach $2300 (about RMB 16,900).

Apple is currently assessing how different tariff regimes at its manufacturing hubs will affect its future global supply chain. It is reported that Apple is avoiding passing on the increased costs to consumers. If Apple takes price hikes measures, they will be implemented in major global markets, not limited to the U.S. market alone.

Currently, the majority of Apple's products are manufactured in China, Vietnam, and India. The Trump administration announced that starting April 9, goods from these countries would be subject to tariffs of 54%, 46%, and 26%, respectively.

Apple is caught in a dilemma: passing on additional expenses to consumers may suppress demand and impact profitability. If Apple shifts to domestic manufacturing in the U.S., it would be a "massive and daunting task," according to analysts at Rosenblatt Securities, requiring several years. Additionally, based on TechInsights analysts' estimates, the manual assembly cost per phone in China might be $30 (about RMB 220), while in the U.S., it could be $300 (about RMB 2199), resulting in Apple paying tens of billions of dollars more in assembly costs alone.

Due to the impact of the tariffs, Apple's stock fell nearly 5% on April 7. Over the past five days, Apple's stock has fallen a total of 18%.

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Original source: https://www.toutiao.com/article/7490818294279045686/

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