New iPhone Launch Amidst Trade Conflict Could Drive Up Prices
The tech giant is set to reveal its latest iPhone models soon. However, the current international trade dispute might result in an unexpected price surge. This adds an extra layer of suspense to the usual excitement that accompanies the annual launch of the company's flagship product.
The unveiling of the new iPhones comes as the President has resumed his position at the White House and has initiated a wave of tariffs. The intent, as stated by his administration, is to encourage the return of offshore manufacturing to the U.S. This move has put the tech company's CEO in a challenging position.
What's in a Name?
If the tech giant sticks with the naming pattern it has used since the iPhone first hit the market in 2007, we could be welcoming the iPhone 17 soon. However, the company, based in California, recently broke away from its traditional naming formula for its operating system. The upcoming free update to its operating system, previewed at a developers conference in June, will be named iOS 26, hinting at the forthcoming year. This marketing strategy has been used by car manufacturers for many years.
Despite this, it's expected that the new iPhones will still be produced in the tech company's factories in China and India, much to the dismay of the current U.S. administration.
Should iPhones be Made in the U.S.?
Both the President and the U.S. Commerce Secretary have repeatedly called for iPhones to be produced in the U.S., rather than overseas. Experts argue that this is an unrealistic expectation, claiming it would take years to achieve and could double or even triple the average iPhone price, currently around $1,000.
To appease the President, the tech company's CEO initially promised to invest $500 billion in the U.S. over the next four years. Last month, he increased this commitment by an additional $100 billion and even presented the President with a statue featuring a 24-karat gold base.
These diplomatic actions have shielded the tech company from some of the President's harshest tariffs. Nevertheless, iPhones imported into the U.S. are still subject to around 25% duties. This has sparked rumors that the company might announce its first broad price increase in five years to maintain its significant profit margins.
Will the iPhone Price Increase?
Since 2020, the basic iPhone model has been priced at $800, with the premium model costing $1,200. Some analysts predict that the company may hike prices by $50 to $100 on some of the new models. If true, this follows just weeks after a major tech competitor refrained from raising prices for its new Pixel smartphones.
Regardless of the price tag on the next iPhone, the new models aren't expected to deviate much from last year’s design, which was the first to be created for a variety of new artificial intelligence features. While the iPhone 16 was largely successful, it didn't sell as well as analysts had hoped for because the promised AI-enhancements, including a smarter and more versatile assistant, weren't fully delivered. These enhancements have been postponed until next year.
This has reduced the expectations for this year's models, which will likely have the standard upgrades in camera quality and battery life, along with a slightly revamped design. The most significant new feature could be the introduction of an ultra-thin iPhone, possibly named "Air" — a name already used for some of the company's slimmest iPads and Mac computers.
Can the Tech Giant Keep Up?
The relatively minor changes to recent iPhone models are causing some to question the tech company’s ability to innovate in the rapidly evolving era of AI, according to a research analyst from Forrester Research. "The company is reaching a tipping point, and I predict 2026 and 2027 will be crucial years."
The blunders in AI, coupled with the company’s involvement in the current trade conflict, have put pressure on the tech company's stock. Meanwhile, the market value of other tech giants like Microsoft, Nvidia, Meta Platforms, and the parent company of Google, has been on the rise.