There has been a lot of speculation about how high Apple might raise iPhone prices in response to Trump’s tariffs. A new report from The Wall Street Journal, however, offers the most realistic look yet at what it currently costs Apple to make the iPhone 16 Pro and how that could change thanks to Trump’s tariffs.
How Trump’s tariffs will impact iPhone prices
The report cites data from TechInsights and iFixit to craft a breakdown of Apple’s costs, commonly referred to as the bill of materials, for an iPhone 16 Pro with 256GB of storage:
- A18 Pro chip: $90.85
- Display: $37.97
- Battery: $4.10
- 5G cellular modem: $26.62
- Memory: $21.80
- Storage: $20.59
- Rear camera array: $126.95
- Main enclosure: $20.79
- All other components: $200.06
Pre-tariff total: $549.73
Pre-tariff total with testing and assembly: $580
Notably, this doesn’t account for things like research and development, marketing, and other non-hardware costs for Apple. Even when you factor those in, the WSJ says “there’s still a healthy profit margin” for Apple.
Right now, Apple charges $1,099 for a 256GB version of the iPhone 16 Pro. While those components come from around the world, all final assembly occurs in China before the phones are imported into the United States. Trump has announced a 54% tariff on goods from China. Apple will pay that on the total cost of the components, not the $1,099 retail price of the iPhone 16 Pro.
Accounting for the 54% tariff, Apple’s cost to make an iPhone 16 Pro with 256GB of storage increases to roughly $847. That’s a major hit to its profit margin, particularly when you factor in the other costs like marketing, research and development, packaging, shipping, and more.
This report (Apple News+ link) from Joanna Stern at The Wall Street Journal is the most pragmatic look yet at how Trump’s tariffs will impact Apple’s costs for the iPhone 16 Pro. Apple, meanwhile, still hasn’t commented on how it plans to respond. The company is highly unlikely to eat the entire 54% tariff. The company may stomach part of the burden, but price increases for consumers seem inevitable.
What about an iPhone made in America? TechInsights analyst Wayne Lam says, “It’s not clear you can make a competitively priced smartphone here.” Lam estimates that “the assembly labor that might cost $30 per phone in China could cost $300 in the U.S.”
My advice from last week stands: if you need an iPhone now or think you might need one soon, now is the time to buy.
My favorite iPhone accessories:
- Anker Power Bank with built-in USB-C Cable
- Charge your iPhone, Apple Watch, and AirPods at the same time
- Bring wireless CarPlay to any car
- Anker MagSafe Power Bank
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