Apple is preparing to raise prices on its upcoming iPhone lineup this fall, aiming to frame the increase around innovation rather than attributing it to external factors like tariffs. The company plans to introduce new design elements and features to justify the higher costs, according to sources familiar with the matter.
High-End Models and Manufacturing Challenges
Despite efforts to diversify manufacturing, China remains central to the production of Apple’s premium Pro and Pro Max models. These high-end devices, which account for a significant portion of U.S. iPhone sales, rely heavily on Chinese assembly lines for their complex components. While Apple has shifted some manufacturing to India, these facilities are not yet equipped to handle the scale and technical precision required for mass-producing premium models.
According to investment bank Jefferies, Apple sold approximately 65 million iPhones in the U.S. last year, with an estimated 36 to 39 million being Pro or Pro Max variants. Given current tariffs, Apple faces rising costs that cannot be fully offset through supplier negotiations. To maintain profit margins, the company is opting to raise prices rather than absorb the impact.
Avoiding Political Blame
Apple’s leadership is cautious about linking price hikes to trade policies. The company is particularly wary of appearing political after the White House reacted sharply when Amazon considered displaying tariff costs to customers. Apple executives see a similar risk if they attribute rising prices to tariffs.
As reported by The Wall Street Journal, Apple CEO Tim Cook has been moving production of lower-end models for the U.S. market to India, with most iPhones shipped to the U.S. in the second quarter expected to originate there. However, for the most profitable models, Apple remains tied to China. Cook stated earlier this month that current tariffs will cost Apple $900 million this quarter alone.
Upcoming iPhone 17 Lineup
Apple is expected to launch its iPhone 17 lineup this fall. The current iPhone 16 ranges from $799 for the base model to $1,199 for the Pro Max. This year’s update will likely include an ultrathin model replacing the iPhone 16 Plus, which now sells for $899.
Apple continues to explore long-term manufacturing shifts to India and the U.S., but supply-chain planners indicate that meaningful change could take years. India accounted for 13% to 14% of global iPhone shipments last year, with output expected to double in 2025. However, even with accelerated growth, India won’t meet full U.S. demand in the near term.
According to TechInsights analyst Abhilash Kumar, India could satisfy both Indian and U.S. demand by 2026 or early 2027. Still, China will remain essential for sourcing components. Jefferies analysts caution that scaling Indian production of high-end iPhones to 40 million units within two years will be a tall order.
