How Much Will the iPhone 17 Cost? Tariff Math Pushes It Over $4,000

Yahoo

2 days ago

For a brief moment, it looked like a federal trade court would halt President Donald Trump's Liberation Day tariffs, leaving everyone to wonder what that could mean for price hikes. But by the end of the following day another court had stepped in so we're back to wondering when and if reciprocal tariffs and Trump's proposed 25% Apple tariff will kick in. So you'll forgive us if we don't sound very certain about how all of this could affect the price of the new iPhone.
We can't even guarantee that it will be called iPhone 17, considering Apple may rebrand its operating system this fall so that the current iOS18 is replaced by iOS 26.
Apple spent much of the early part of this year dodging tariffs, stockpiling phones before tariffs took effect and making an exemption list for many of its products. But its luck appeared to run out after Apple CEO Tim Cook announced during a May 1 earnings call that US iPhone production would mostly be sourced from India. A few weeks later, Trump threatened Apple with a 25% tariff on all iPhones made outside the US.
Is that tariff on top of the paused reciprocal tariffs? While it may be unrealistic for Apple to pass along the total cost of the tariff to consumers (who's going to buy a $4,000 iPhone?), it also seems unlikely that the tech giant could absorb the costs of a 170% tariff hike (that's 25% Apple tariff + 145% reciprocal tariff on China, where Apple has produced most of its iPhones).
Plus, there are plenty of factors that can affect the price of an iPhone, including production costs and the overall health of the US economy. My colleague Patrick Holland has been reviewing phones for CNET since 2016 and tracking prices over the years. He says the new iPhone is due for a price hike regardless of what happens with tariffs.
Apple did not respond to a request for comment for an earlier version of this story.
We won't know the exact price for the next iPhone until its release, which is expected to be in September. But we've pored over all the leaks, rumors and predictions about prices and we found ways to help you save if a new iPhone is in your future.
Read more: Want to Buy a New iPhone? Now's Not the Time and Here's Why
Amid Trump's ongoing tariff bender, higher reciprocal tariffs are currently on pause. However, Trump took to social media on May 28, threatening Apple with a 25% tariff on all iPhones made outside the US, although the timeline is unclear. There's currently a 10% baseline tariff on all imports and a 30% tariff on goods from China, where Apple still manufactures most of its products. Those rates may also start to rise in July when the initial tariff pause expires, which could lead to higher prices on everything -- including the rumored iPhone 17.
The tech giant has moved some US iPhone production from China to India, which currently has a lower tariff rate. However, Trump called out Apple CEO Tim Cook to instead move iPhone production to the US. Most experts consider this an unrealistic demand, especially in the short term, because of higher labor and production costs in the US. Estimates have suggested that a US-made iPhone would cost as much as $3,500.
That leaves prices for the next iPhone in limbo. Trump's administration called the exemption list "temporary" in early April, saying that exemptions would end in "a month or two." Around the same time, Trump said that semiconductors, which power tech products, will eventually be placed in a different "tariff bucket." However, no details have been shared about the timeline or expected tariff percentages.
With all the reprieves appearing to be temporary, tariffs could still potentially affect prices by the time the rumored iPhone 17 is expected to be released.
If the original reciprocal tariff pause expires, for instance, taxes on imports from India would rise from 10% to 26% starting in July. If the 90-day pause for China expires, tariffs on that country would jump from 30% to 145% in August. It's unclear if Apple's 25% tariff would be in addition to or instead of individual countries' import duties.
Experts point out that a tariff rate hike doesn't necessarily mean an iPhone's price would increase at the same rate but most expect at least some impact.
And where the phone is assembled is only part of the tariff equation. Apple sources components for the iPhone from dozens of other countries, which could also potentially affect the price.
Based on where tariffs stand now, here's how much you could potentially pay for the next iPhone based on current iPhone 16 prices. These are our estimates and not official pricing from Apple:
If the 25% Apple tariff takes effect, here's the potential price increase for a new iPhone, based on the current iPhone 16 prices. Again, Apple is unlikely to raise prices at a 1-to-1 rate with tariff hikes but this table incorporates reciprocal and potential Apple specific tariffs to calculate potential prices:
Trump immediately criticized retailers like Amazon and Walmart when they suggested that tariffs could result in higher prices so it stands to reason that Apple won't directly blame tariffs for potential price hikes that could provoke a Trump tirade.
Rather, Apple could attribute the price increase to improved features and design costs. Regardless of tariffs, Apple has plans to raise iPhone prices this year, The Wall Street Journal reported.
Experts say Apple may be overdue for a price increase anyway. It's been five years since the basic iPhone model increased in price and each iteration of the iPhone generally improves on features from the previous version.
Holland notes that the base iPhone model hasn't gone up in price since 2020. His research points to the standard iPhone model's price increasing approximately every five years, between $50 and $130. Based on this evidence and the iPhone 16's current price of $829, we could expect the new iPhone to cost somewhere between $879 and $959.
Early rumors had the iPhone 17 Air topping the iPhone Pro in price. However, a March Bloomberg report suggested the phone could cost about $900, similar to the current iPhone 16 Plus's price tag. Those estimates are based on the current costs and may not include the potential impact tariffs could have on an ultrathin iPhone's price.
Uncertainty in the US economy -- in part because of the aforementioned tariff turmoil -- has left many wary about what's to come. While the recent agreement with China to pause tariffs helped the stock market to mostly recover from the dive it took after Trump's Liberation Day, that reprieve offers only temporary relief.
Concerns about the risks of higher unemployment and higher inflation have left the Federal Reserve in wait-and-see mode for lowering interest rates. Higher interest rates can cause companies like Apple to pull back on spending and investment. Combined with higher tariffs, that pullback could potentially lead to global supply chain disruptions. Fewer iPhones available in the market could lead to higher prices.
If inflation resurges, rising costs could force Apple to increase the next iPhone's price.
One tiny bright side, in theory, is that a weakening economy could force Apple to hold off on raising prices so it can stay competitive. But that may not offer much consolation if you're worried about spending money because of a potential recession.
One way to save on Apple products is to buy last year's model instead of the newest release. However, if the new iPhone is dramatically more expensive when it's released, demand could increase for the older models and that could lead to price hikes on older models, too.
The flip side of this is that if the new iPhone's prices rise and you have an older iPhone, your old iPhone would also likely increase in value, Holland said.
Trading or selling a used iPhone can help offset the cost if you do decide to buy the new iPhone.
Even if Apple decides to hold the next iPhone's price steady, there are other ways for the tech giant to recoup increased costs.
Apple could potentially offset the impact of tariffs by raising the price on its services -- including its music, news and data plans -- according to supply chain expert Joe Hudicka.
"We'll see those markups in the subscription services first because they'll appear smaller," he said. "Consumers will still pay, just not all at once."
So seriously, how much is a new iPhone going to cost? The truth is, we can't say with any certainty what the final numbers will be. Our assessments are based on ever-changing tariff policies, past pricing trends, rumors and leaks that are sometimes based on insider knowledge. But until Apple releases the rumored iPhone 17, we can only offer our best estimates for how much the final price tag will be.