Apple Faces Price Hikes Amid Market Turmoil and Tariff Impact

The recent fluctuations in the stock market, triggered by policies from the Trump administration, have significantly affected major corporations, with Apple Inc. experiencing one of the most severe declines. Since early April, Apple's stock has plummeted from over EUR200 to EUR165, resulting in a staggering loss of more than EUR300 billion in market capitalization.

The primary reason behind this downturn is Apple's heavy reliance on China for the majority of its iPhone production. With the introduction of new tariffs by the Trump administration, which could escalate to as high as 54%, the company is facing unprecedented challenges. Moreover, Apple's manufacturing facilities in countries like Vietnam and India are also feeling the impact of these trade policies.

Analysts predict that if Apple opts to pass these additional costs onto consumers, the price of iPhones could soar by as much as 43%. For instance, the iPhone 16 Pro Max, featuring a 6.9-inch display and 1 terabyte of storage, could see its price jump from $1,599 to nearly $2,300 (EUR2,090). The standard model's price might increase from $799 to $1,142 (EUR1,037). Such price hikes would be unprecedented in the market.

Additionally, other products, including iPads, Macs, and AirPods, may also face price increases ranging from 39% to 42% due to the same tariffs. If these tariffs remain in place, Apple could incur losses approaching $40 billion. More conservatively, Morgan Stanley projects an annual loss for Apple of around $8.5 billion.

Investor sentiment has turned negative in response to these developments. Following the announcement of the tariff plans, Apple's market value dropped by nearly 20%. Compared to its peak stock price of EUR245.50 just before the New Year, the current valuation of EUR155 represents a decline of almost 37%. However, there has been a slight recovery since the initial drop.

Looking ahead, Apple may continue to face adverse repercussions. In Europe, there are increasing calls for retaliation against the U.S. tariffs, particularly targeting American tech giants like Apple. This situation adds another layer of complexity to Apple's operations and market positioning.