iPhone Prices Could Soar to Rs 3 Lakh If Production Moves to the U.S.
Experts Warn That Manufacturing iPhones Domestically May Triple Costs Despite Job Creation Goals
The recent action by the U.S. government to tax imported products is meant to motivate businesses to restore factory jobs within American borders. President Donald Trump projects that this policy will generate millions of new jobs and revitalize domestic industries. But experts caution that this scheme will result in much increased prices for consumers, particularly for items such as the iPhone.
If Apple were to produce iPhones entirely within the United States, each iPhone could cost up to approximately $3,500 (Rs 3 lakh), as per a CNN report. The lowest version of the iPhone currently sells for around $1,000. The price surge is because it would involve exorbitant expenses in establishing and maintaining high-end manufacturing units within the U.S.
Presently, most iPhones are manufactured in China, where the cost of labor is relatively cheaper. If Apple were to switch its production base to America, it would take billions of dollars in the construction of new plants and creating complicated supply networks—an infrastructure which has taken a whole generation of years to cultivate in Asia.
The study points out that even if it were to shift a minimal section of Apple’s supply base to the United States, the shift would not take less than three years and up to $30 billion. It would be the equivalent of 10% of Apple’s manufacturing.
Apple’s Rely on Asia
The parts that make up an iPhone are made in various countries. For example, chips are made mostly in Taiwan, screens in South Korea, and the rest in China. After being produced, the parts are assembled in Chinese plants before being shipped worldwide. This complex global supply chain has enabled Apple to have lower prices and enjoy huge profit margins, leading to the company’s reputation as one of the world’s most successful tech titans.
Effect of Tariffs on Apple’s Operations
Apple’s share price has fallen by about 25% since the new tariff was announced. In a move to cushion it from overdependence on China, Apple has already started scouting for alternative manufacturing sites, like India and Brazil, where the tariff charges are not as heavy.
Even if Apple chooses not to move its production back to the United States, the threat of higher iPhone prices exists. Rising tariffs would increase the expense of shipping components in, potentially requiring consumers to pay more. Analysts predict that fresh models could have their price jump by as much as 43%.
As the geography of world manufacturing and trade continues to shift, the effect on consumers and the technology sector is unclear, highlighting the fine balance between job creation at home and product price.
