Kuo: Apple Can Reduce Impact of Trump's Massive Tariffs in Five Ways

Apple supply chain analyst Ming-Chi Kuo today said that if Apple does not raise prices, its overall gross profit margin could face a significant drop of 8.5% to 9%, due to the tariffs significantly raising costs. However, he outlined five ways in which Apple can reduce the impact of the tariffs on its gross margins going forward:
- Apple can boost iPhone production in India. Kuo said if India can secure tariff exemptions through new trading agreements with the U.S., and Apple boosts its iPhone production capacity there to over 30% of its global supply, the negative impact on gross margins could shrink to just 1% to 3%.
- Apple could raise prices on iPhone Pro models. In the U.S. market, Kuo said high-end iPhones account for 65-70% of new model sales, and he believes that "high-end consumers are relatively more accepting of price increases." So, the Pro and Pro Max models could see price increases, if absolutely necessary.
- Apple could increase carrier subsidies for iPhones.
- Apple could reduce trade-in values to partially offset the costs of tariffs.
- Apple could put even greater pressure on its suppliers to cut costs.
Apple's stock price dropped more than 7% in after-hours trading, after Trump's announcement.
This article, "Kuo: Apple Can Reduce Impact of Trump's Massive Tariffs in Five Ways" first appeared on MacRumors.com
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