Apple would have to raise the price of the iPhone by $68 on average to offset the damage from the 15% tariff on Chinese goods that took effect Monday, one analyst said.
With an average iPhone selling for $750, that would raise the average sales price to $818, according to an estimate by Shawn Harrison, an analyst for Longbow Research.
Harrison also estimated that Apple’s annual earnings per share would drop 19 cents to 20 cents unless Apple raises prices to cover the tariffs.
Certain Apple products in the wearables category could still be sold without a change in price or an impact on earnings, but the next round of tariffs in December could lower Apple’s earnings by more than $1 a share, Harrison said.
On CNBC on Tuesday, Harrison said his numbers are based on an estimate of $30 billion in Apple sales in fiscal 2020, of which about 35% would be sold in the U.S. and subject to the 15% import tariff, yielding a total cost of $983 million.
Apple shares dropped about 1.5% on Tuesday.