President Donald Trump has been ramping up pressure on Apple CEO Tim Cook to build the company's iPhones in the U.S.
The president last week said he had "a little problem" with the tech mogul and threatened Friday to slap 25-percent tariffs on the phones unless they were built in the U.S., but analysts say Trump's demand is logistically daunting and economically unfeasible, reported CNBC.
“In terms of profitability, it’s way better for Apple to take the hit of a 25% tariff on iPhones sold in the US market than to move iPhone assembly lines back to U.S.,” posted Apple supply chain analyst Ming-Chi Kuo on X.
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UBC analyst David Vogt agreed, saying the company-specific tariff threats were a “jarring headline,” but he said Trump's plan if carried through would drop annual earnings by 51 cents per share instead of the expected 34-cent drop under the current tariff situation.
"Experts have long held that a U.S.-made iPhone is impossible at worst and highly expensive at best," CNBC reported.
American-made iPhones would cost up to $3,500 retail, analysts say, and getting supply chains sorted out and factories built would take years, and some imported materials and parts could be subjected to costly tariffs.
“We believe the concept of Apple producing iPhones in the US is a fairy tale that is not feasible,” wrote Wedbush analyst Dan Ives in a note on Friday.
Trump granted a tariff waiver in April on Apple's most important products, and many experts doubt his threatened tariffs against the company will ever be imposed.
“We’re skeptical,” wrote Wells Fargo analyst Aaron Rakers, who said Apple could raise prices by up to $300 to keep its 41-percent gross margin on the phones.