U.S. consumers are reportedly rushing to Apple Inc.
What Happened: Following last week's announcement of higher tariffs on Chinese goods, including a 25% levy on electronics, Apple customers have begun upgrading their iPhones in anticipation of a price increase, reported The Wall Street Journal.
Joel Burke, a policy professional in Washington, D.C., is among the many who acted quickly. "You gotta take care of your own personal needs and there's no question in my mind that the prices are going to go up," Burke said.
Over the weekend, Apple stores in San Francisco also confirmed that customers mentioned tariffs as a reason for their purchases, the report noted, citing sales associates.
Ryan Reith, a senior research analyst for IDC, noted that Apple, like other hardware companies, typically keeps only four to eight weeks of inventory in stock, and with demand surging, the company may not have enough units to last until the expected new iPhone launch in September.
Allison Post, a 69-year-old health writer, upgraded her six-year-old iPhone 8 after the tariff announcement. "The tariffs for sure pushed me out the door," she said, noting that she also convinced her husband to purchase a new MacBook. "Why pay what might turn out to be double?"
Why It Matters: According to TechInsights, the tariffs could raise the manufacturing cost of an iPhone by more than 45%, increasing the price from $580 to $850 per unit.
While it's unclear whether Apple will absorb these additional costs or pass them on to consumers, the possibility of price hikes has led many to act now.
Apple relies heavily on Chinese manufacturing for its iPhones, which account for approximately 50% of the company's revenue. iPhone sales for the first quarter totaled $69.14 billion, a slight decrease from $69.7 billion during the same period last year.
Apple is also reportedly increasing its iPhone production in India to help cushion the financial blow from President Trump's rising tariffs on Chinese imports.
Price Action: Apple's stock has declined roughly 25.59% year-to-date, closing at $181.46 on Monday, according to Benzinga Pro data.
