Last year, Apple had sent a letter to the government asking them to exempt its products from import tariff hike. The goods were exempted from the tax last year. That being said, it might not be possible for Apple to get another exemption this year.
The iPhone and MacBook Pro are excluded from the list for the time being. However, Apple AirPods, HomePod, and Apple Watch account for a considerable chunk of the companies revenue. In the latest earnings call, Tim Cook revealed that iPhones make for less than 50 percent of the sales while the rest is from services and products like Apple Watch. In fact, Apple’s all-important services unit booked a staggering $11.46 billion in revenue which is almost twice as much as revenue from Mac sales.
It is to be seen whether or not Apple will absorb the increase in tariff or gradually pass it on to the users. It was reported earlier that Apple might absorb the rise in import duties for iPhones. For instance, Apple didn’t increase the price on its chargers despite the freshly imposed tax hike. On the other hand, if Apple passes on the brunt to the consumers then they will lose to the competition.
Meanwhile, the Cupertino company is likely to shift production out of China. It is rumored that India and Taiwan are on the list when it comes to setting up new iPhone facilities. Are you willing to pay extra money because of import tariff hike or will you go for products from other companies? Let us know in the comments.[via TheVerge]