As uncertainty in the global economy has increased due to U.S. President Donald Trump's tariff policy, an investment bank has analyzed that Apple may need to raise the price of the iPhone by about 9% to completely offset the effects of tariffs.
According to a report by CNBC on the 19th (local time), Wamsi Mohan, an analyst at Bank of America (BofA), projected that Apple would need to raise the prices of the iPhone and iPad by about 9% under the assumption that all Apple products face at least a 10% tariff.
On the 4th, President Trump began to expand the 'tariff front' by imposing an additional 10% tariff on China. He stated that there would be a tariff of around 25% on semiconductors and automobiles, and has indicated plans for 'reciprocal tariffs' against trade partners. Apple has production bases in China and is expected to be affected by these reciprocal tariffs.
Mohan expected that if Apple does not raise its domestic selling prices despite the tariffs, earnings per share (EPS) would drop by 26 cents, or 3.1%, next year. He also noted that if prices are increased by about 3% to reflect rising expenses due to tariffs, EPS would decline by 21 cents, or 2.4%. This figure assumes that the sales volume of Apple devices would decrease by 5% due to the price increase, and if sales do not decrease as much, the EPS impact may be less.
In light of this background, Mohan projected that Apple may need to raise prices by 9% to fully offset the impacts of tariffs. He also stated that even if Apple transfers production to other countries like India to avoid tariffs on China, it is still likely to be impacted by reciprocal tariffs. The reciprocal tariff rate for India may exceed the additional 10% tariff imposed on China.
However, as it appears that Apple will be able to manage the effects of tariffs, the view on buying Apple stocks has been maintained. The target stock price is set at $265, indicating that there is still an upward potential of more than 8% compared to the closing price that day.