A US-built iPhone could cost 90% more, BofA says

Following yesterday’s comments from the White House that Apple (NASDAQ:AAPL) could build an iPhone in the U.S., Bank of America said an endeavor is “technically possible,” but it would come at an enormous cost.

Shares rose 3% in early trading on Wednesday, erasing premarket losses.

“In our opinion, iPhone cost can increase 25% purely on higher labor cost in the U.S.,” analyst Wamsi Mohan wrote in a note to clients. “On top of that, if Apple had to pay reciprocal tariffs to import sub-assemblies into the U.S., we see the total cost of an iPhone increasing 90%+.”

Mohan, who has a Buy rating and $250 price target on Apple, took his estimates based on the iPhone 16 Pro Max.

Assuming Apple could find the labor in the U.S. to assemble iPhones, Mohan said that a “significant” portion of the sub-assemblies would still need to be manufactured elsewhere, assembled in China and then imported to the U.S. “This is because, while it may be possible to move final assembly to the U.S., moving the entire iPhone supply chain would be a much bigger undertaking and would likely take many years, if even possible,” Mohan explained.

Despite efforts to diversify its supply chain geographically, Apple still relies on China for a significant portion of its manufacturing needs, specifically iPhones. Investment firm Needham recently estimated that Apple’s fiscal 2025 earnings could be negatively impacted by 28% or more in a trade war between China and the U.S. unless it was given an exemption.

Aside from China, Apple and its partners manufacture iPhones, AirPods, Apple Watches, Macs and iPads in several countries, including India, Vietnam and Brazil. All of these countries have also been hit with tariffs by President Trump.

Apple releases its second quarter fiscal 2025 financial results on May 1. A consensus estimate expects Apple to report earnings per share of $1.61 on revenue of $94.04B. Seeking Alpha