Renders of a possible iPhone 17 Pro design
The investment firm Morgan Stanley theorizes that Apple has long -term options to protect its professional prices of the iPhone 17 of tariff increases, including buyers of address to greater storage capacities, which have a greater profit margin.
Although Trump has now stopped many tariffs, and although it is possible that Apple obtains an exemption, the company will not bet on that. Undoubtedly, Apple will take any exemption that you can obtain, but also knows that Trump changes his mind for whim, so he will look for a long game.
That is the opinion of Morgan Stanley analysts, in a new note for investors seen by Apple. They even see a route through the Turbulence that could see it capable of maintaining the prices of its iPhone at the same level as before.
Or at least, to do that effectively. Morgan Stanley wonders if Apple will repeat what he did to store in the movement of the iPhone 14 Pro Max al iPhone 15 Pro Max.
Apple can benefit from its high storage prices
In 2023, Apple began the iPhone 15 Pro Max at $ 1,199, but approached how it was doing it with 25 GB. There was no longer a $ 1,099 model with 128 GB, so Greg Joswiak could announce that this coincided with “last year’s price with this storage level.”
Then, the initial price of the iPhone 15 Pro Max was greater than the iPhone 14 Pro Max, but Apple could say that it was the same price considering what storage was obtaining.
Morgan Stanley estimates that Apple’s gross margin in the highest extreme iPhone storage is 10-15 points higher than the lowest. So, if Apple can bring users to higher storage models, thought is that it has some insulation room to absorb rate costs.
Analysts think that could work if Apple produces the highest storage models in China, but also significantly increases another iPhone production in India. It is already said that the company is ultimately pointing to doing 25% of all iPhones in India, and Morgan Stanley believes that will accelerate that.
Currently, analysts estimate that India is now producing between 30 million to 40 million iPhones annually. With around 12 million for Indian buyers, that means between 18 million and 28 million to be sent worldwide.
Apple sent 66 million iPhones to the United States in the last 12 months, so India would have to drastically increase its production. Morgan Stanley believes that India could have the ability to do so, but assumes that it will take more than six to twelve months.
Then, of course, India and all countries have faced tariffs and could do it again in 90 days or in a hat. Although Trump finally admitted that “some” companies had been beaten by tariffs, it is likely to restore them, but not as strongly as with China.
Apple could use long update cycles for its advantage
Another possibility, according to Morgan Stanley, is that Apple could get a benefit of how long people cling to their iPhones. Despite the regular expectations of high supercyclo updates, replacement iPhone cycles are lengthening.
Then, Morgan Stanley raises, Apple could extend its iPhone fees for the Apple card from 24 months to 36. That might not appreciate the update sales, but it would mean that monthly payments would be lower.
So, also, Apple in recent years has made a point of talking about offers of operators and exchange values even during iPhone launch events.
Morgan Stanley believes that Apple could increase its efforts on this and take advantage of more financing plans. Or that can work more with operators to offer more attractive exchange values.
How all this develops
All this is an assumption by Morgan Stanley, but it is based on how Apple has been expanding in India. And it is based on how Apple achieved that price increase of iPhone 15 Pro Max in 2023.
Morgan Stanley offers that if India can make 40 million iPhones for the United States in 202, then China would still have to make 25 million to meet the US demand. With a rate rate of 125%, those 25 million iPhones would cost Apple around $ 17 billion in rates.
But analysts argue that if Apple only matters the highest -end storage models of China and leave the rest to India, it could reduce that rate bill in more than half.
Morgan Stanley does not say that Apple does all this, or that it has privileged information. In other words, it is a plausible scenario, and that Apple is likely to be considering.
However, the investment company has not increased its target Apple price. That was reduced to $ 225 immediately after the announcement of the rates, and is currently at $ 220.
#High #Apple #storage #prices #key #mitigating #rates
