Apple’s iPhones aren’t what you’d call cheap – but the next version could be even more expensive when it arrives later this year.
That’s what a few tech commentators are saying in light of the escalating trade war between the US and China. Because although the iPhone is ‘Designed in California’ it is very much ‘Made in China’.
Apple uses manufacturing companies in China to put the iPhone and the iPad together – and has done for the last decade. With trade tariffs being imposed between the two countries, Apple is either facing the prospect of a more expensive production line or the task of relocating manufacturing elsewhere.
‘As we moved production to Asia over the past 20 years or so, all the supply chains moved as well,’ Rosemary Coates, executive director of the Reshoring Institute and president of Blue Silk Consulting, told Digital Trends.
‘There’s a pretty fabulous integrated supply chain for almost any product you can imagine,’ she said, before telling the site that reestablishing that somewhere else at the scale needed could take between 12 and 18 months.
In which case, she estimates Apple’s costs would increase by 30%. And if that were passed on to customers, it could inflate the iPhone way past the £1,000 mark that it hit with iPhone X in 2017.
Last month, the US more than doubled tariffs on $200 billion (£153b) in Chinese imports. China vowed to impose ‘necessary countermeasures’ but its options are running out due to the lopsided trade balance between the two largest economies in the world. Beijing retaliated to previous tariff increases by raising duties on $110 billion (£84b) of American imports.
We’re not sure when these trade disputes will be resolved, but hopefully it’ll be before September which is when the iPhone XI is expected to be unveiled.
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