APPLE could raise prices for its next iPhone model by £300 – and possibly even £435 for the top-spec model. That’s the warning from one expert who thinks the US-China trade war could see Apple’s production costs spiralling out of control. The majority of Apple’s gadgets are made in China, but the trade war means […]
APPLE could raise prices for its next iPhone model by £300 – and possibly even £435 for the top-spec model.
That’s the warning from one expert who thinks the US-China trade war could see Apple’s production costs spiralling out of control.
The majority of Apple’s gadgets are made in China, but the trade war means Apple may be forced to move production elsewhere.
And this, experts think, could see Apple paying more to manufacture iPhones in the short term.
This could see the cost of the rumoured iPhone 11 – due out in September – rising by hundreds of pounds.
“As we moved production to Asia over the past 20 years or so, all the supply chains moved as well,” said analyst Rosemary Coates, of Blue Silk Consulting, speaking to Digital Trends.
“There’s a pretty fabulous integrated supply chain for almost any product you can imagine.”
According to Coates, big shifts in production don’t “just happen with the snap of a finger”.
She added: “Almost no place can match the manufacturing might of China at the moment.”
The expert analyst warned that such moving away from China could increase Apple’s manufacturing costs by 30%.
And this cost could then be passed onto regular iPhone customers.
Of course, Apple might not pass increased costs onto consumers – so don’t panic just yet.
It’s also worth remembering that smartphones are increasingly valuable and important to our lives now.
So much of what we do – including talking, getting around and organising our lives – is tied into mobile.
That’s why Brits have been willing to cough up progressively more money for their smartphones over the years.
Here's the full list of launch prices, plus the price adjusted for inflation...
It’s also worth remembering that Apple’s iPhone prices aren’t entirely tied to manufacturing costs.
You’re also paying for their “softer” departments like marketing, PR, design and general logistics.
So a 30% rise in manufacturing cost wouldn’t necessarily mean a 30% rise in your iPhone price.
What seems likeliest is that the price of an iPhone would rise, but perhaps not by as much as 30%.
Apple could also absorb the cost entirely, so that Brits aren’t put off buying the iPhone.
Of course, it’s also possible that Apple might raise prices on iPhone for no other reason than increased profits – tariffs or no tariffs.
Earlier this week, it emerged that Apple could shift iPhone production out of China to avoid tariffs.
Although Apple designs its iPhones in California, a Taiwanese company called Foxconn physically manufactures them.
Foxconn uses a number of factories in China to produce iPhone models, which are then slapped with 20% tariffs when they’re shipped to the USA.
And Foxconn has revealed it’s able to move production of US iPhone models outside of China.
“We are totally capable of dealing with Apple’s needs to move production lines if they have any,” said Foxconn’s Young-Way Liu, as reported by the Wall Street Journal.
Here's what you need to know...
He explained that production could be expanded at factories around the world “according to the needs of our clients”.
Foxconn already has plants at a number of locations, including the USA, India, Brazil, Mexico, Japan, Indonesia, Australia, the Czech Republic, and China.
It’s important to note that Apple hasn’t actually signalled plans to ditch China for production of its iPhone models.
However, Apple CEO Tim Cook showed interest in boosting gadget manufacturing in India during a visit to the country last year.
And Foxconn has been considering expanding its own production plants in India, to reduce its reliance on China.
Apple declined to comment on moving production out of China.
Apple’s next iPhone may have already been leaked, courtesy of some early phone cases.
In other news, the iPhone 11 ‘will charge to 50% in just 30 minutes’ thanks to new ultra-fast plug and cable.
The phone could also be ‘coming in two new colours’ we’ve never seen from Apple before, report claims.
Do you think smartphones are just too expensive these days? Let us know in the comments!
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