Apple is no stranger to high-priced gadgets, and has always billed itself as providing a “premium” user experience that justifies the added cost. However, in recent years, we’ve seen that Apple’s pricing has in many cases gone through the stratosphere.
There’s a potential that those lofty prices could go even higher thanks to the trade war between the United States and China that has been escalating at a rapid clip. In the most recent war of words, President Donald J. Trump is threatening to levy a 10 percent tariff on electronic devices manufactured in China and then sold in the United States. This would affect nearly every tech manufacturer that has a significant presence stateside.
However, President Trump says that such a price increase would be inconsequential to Apple customers. During an interview this week with The Wall Street Journal, President Trump said of iPhone customers, “I mean, I can make it 10 percent, and people could stand that very easily.” Referencing the tough trade talks with China, President Trump added, “If we don’t make a deal, then I’m going to put the $267 billion additional on.”
He went on to state that companies like Apple could avoid such tariffs by “[building] factories in the United States and to make the product here.”
The 10 percent tariff would no doubt increase prices for Apple goods that are already quite expensive (comparatively speaking). Apple pushed people to the brink last year with the iPhone X, which started at an unheard of (at the time) $999. However, despite public lashings, the iPhone X went on to become the best-selling iPhone throughout late 2017 and through 2018. The new iPhone XS starts at $999, while the larger 6.5-inch iPhone XS Max starts at $1,099 and tops out at a whopping $1,449.
Last year’s 10.5- and 12.9-inch iPad Pros debuted at $649 and $799 respectively. Today, the new 11-inch and 12.9-inch iPad Pros start at $799 and $999 respectively. That’s a $150 and $200 increase respectively year-over-year. Even the Apple Pencil, which cost $99 last year now rings up at $129. It isn’t even compatible with last year’s iPad Pro (and vice versa) and loses the spare tip that was included in the box with the first-generation Apple Pencil.
Apple is confident that its customers are willing to pay these inflated prices (sans tariffs), and President Trump — likely rightfully so — seems to think that adding another 10 percent isn’t going to really change buying patterns.
Following the launch of the iPhone XS and iPhone XS Max, Apple CEO Tim Cook responded to cries that his company’s pricing had gotten out of hand. “If you look at even at the phone that’s priced over $1,000, most people pay about $30 a month for an iPhone or $1 a day,” Cook explained. “People want the most innovative product available, and it’s not cheap to do that.”