Apple is considering making future iPhones in the United States. Now, an analyst suggests that the company should charge a surplus of $100 to $200 for the smartphones that are "Made in America."
Apple sells millions of iPhones each year but the majority of the devices are presently made in China by Foxconn. However, President Donald Trump's Made in America initiative could change things for the Cupertino-based company.
In an interview with the New York Times, Trump mentioned that he had spoken to Tim Cook about making iPhones in the country. Trump also confirmed that Apple will receive tax cuts and incentives to start making iPhones in the United States.
"I think we'll create the incentives for you, and I think you're going to do it. We're going for a very large tax cut for corporations, which you'll be happy about," Trump said to Cook.
iPhones made in the United States may impact the price of the Apple smartphones. However, incentives from the Trump administration would mean that the company may not have to increase the price of the device, if it is produced in the country.
Apple Should Charge $100 To $200 For iPhones Made In America
Brian White, an analyst and the global head of technology hardware and software at Drexel Hamilton, told CNBC that Apple is under a lot of pressure to bring iPhone production to the United States. He noted that the company should start making iPhones in the country, even if it means an increase in price.
Apple might incur a loss in producing the iPhone in the United States despite the incentives and tax cuts. However, White suggests that Apple should charge a surplus of $100 to $200 to balance that loss.
"If I were Apple, I would bring whatever they need to bring back — through the repatriation, because it may be connected — and they could market iPhones made in the U.S. and charge a premium," says White.
Current Cost Of iPhone 7 And iPhone 7 Plus
The iPhone 7 and the iPhone 7 Plus are one of the most expensive smartphones available in the market. The 32 GB base model of the iPhone 7 bears a price tag of $649 while the top model with 256 GB costs $849.
The price of the iPhone 7 Plus starts at $769 and it can go up to $969. A surcharge of $100 to $200 would inflate the prices and make for unhappy buyers.
Apple has not revealed any plans of hiking the price of the iPhone if production is based in the United States. Apple making iPhones in the country is imminent; however, it remains to seem if the company takes the path of increasing the price of Made in America iPhones in the near term.
