Dan Ives, an analyst from Wedbush Securities, has warned that the idea of manufacturing Apple Inc. AAPL products, including iPhones, in the U.S. is not feasible and would result in significantly higher costs.
What Happened: Ives shared a post on X, formerly Twitter, and said, "If you like a $3,500 iPhone, we should build them in the US or a $1,000 iPhone built in China. Discuss below."
He shared an image from a note that stated, "Making Apple products and iPhones in the U.S. sounds great behind the microphones in the 202 area code…but in reality, they are a fantasy tale that in our view will never happen."
He went on to stress that moving production to the U.S. would likely drive iPhone prices up by two to three times.
He said that the logistics of moving iPhone manufacturing to the U.S. would be a "non-starter" at the current price point. "For U.S. consumers, the reality of a $1,000 iPhone being one of the best-made consumer products on the planet would disappear."
Ming-Chi Kuo, an analyst at TF International Securities, also weighed in on the situation, suggesting that while Apple has made progress in shifting some production outside China, it faces substantial challenges due to the Donald Trump administration's tariffs.
"If Apple keeps prices unchanged, its overall gross margin could significantly drop by an estimated 8.5-9%," he stated.
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Why It Matters: President Trump’s broad new trade tariffs rattled global markets on Thursday, sparking a massive sell-off reminiscent of the COVID-19 pandemic era.
Wall Street saw a staggering $2 trillion in market value erased, with the 10 largest U.S. companies alone losing $1 trillion. Apple tumbled 9.25%, facing its steepest decline since March 2020 and shedding nearly $300 billion in market capitalization.
Rosenblatt analyst Barton Crockett estimated that Apple could be hit with $39.5 billion in tariff costs based on initial calculations. He noted that nearly 100% of iPhones sold in the U.S. are manufactured in China, along with 90% of Macs, 80% of iPads, 90% of Apple Watches, and 35% of AirPods.
While some of these products are also produced in Vietnam, both China and Vietnam face steep tariffs of 54% and 46%, respectively.
Price Action: Apple shares have declined 16.67% year-to-date, but over the past 12 months, the stock has gained 17.77%, according to Benzinga Pro.
Based on Benzinga’s Edge Rankings, Apple has a growth rating of 44.96%. Want to see how other companies compare? Click here for the full rankings.
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