Apple will not increase the price of its products due to tariffs, it will cover the increased costs out of its own pocket

Last week, American Apple fans received unpleasant news - the US administration imposed new customs duties for more goods from China, and this time they will most likely not avoid Apple. In reality, there is a risk that almost most products with a bitten apple in the emblem will be affected by a 10% tariff on the American market. This has brought concerns about possible price increases for products. However, it probably won't happen in the end.

If tariffs on Apple products really do happen, Apple practically has two options, what to do next. Either the products on the American market will become more expensive in order to compensate for the 10% duty, or they will keep the price of the products at the current level and pay the duty "out of their own pocket", i.e. at their own expense. As it seems, option number two is more realistic.

The information was provided by analyst Ming-Chi Kuo, who claims in his latest report that if the new tariffs eventually affect goods from Apple, it will maintain its current pricing policy and cover the customs fees at its own expense. Such a step would be favorable both to customers and to their subcontractors. In addition, Apple would keep its face in front of the public.

According to Kuo, Apple can afford a similar move especially because Tim Cook et al. they were preparing for a similar eventuality. In recent months, Apple has been making efforts to move the production of some components and products outside of China, effectively avoiding the imposition of tariffs on its products. Diversification of the supply network outside of China (India, Vietnam...) will probably be more expensive than the current situation, but it will still be more profitable compared to customs. This will be a profitable strategy in the long run.

And before the above-mentioned happens, Apple has enough funds to offset the customs burden without impacting the end price of the product, i.e. its domestic customer. The tendency to move some production plants from China was also discussed last week by Tim Cook, who discussed this topic with Apple shareholders during the presentation of economic results for the past quarter. New manufacturing plants outside of China could be fully operational within two years.

Source: Macrumors