The Trump administration’s threat to impose new large-scale tariffs caused Apple’s (and other tech giants’) shares to plummet. But at the same time, such actions brought the Cupertino company a short-term benefit: customers flocked to retail stores to buy iPhones.
Employees from various Apple stores across the country reported that the stores were crowded over the weekend with customers worried that prices would rise sharply after the tariffs were imposed. Most iPhone models are made in China, which is facing 54% tariffs.
One employee said their store was «crowded with people buying up phones in a panic»:
«Almost every customer asked me if prices would go up in the near future,» said the employee, who wished to remain anonymous because he did not have permission to speak publicly.
Although there were no queues like at the launch of new iPhone models, the atmosphere in the stores resembled a Christmas rush, employees say.
«People just run in, excited, asking questions,» one of them added, noting that the company has not provided instructions on how to respond to such requests.
This excitement has led to an increase in sales. In some major cities, Apple’s retail stores in the US showed better results over the weekend than in previous years. An Apple spokesperson declined to comment.
Apple will report its second-quarter financial results on May 1, which will give CEO Tim Cook and CFO Kevin Parekh an opportunity to discuss the impact of the expected tariffs. During the last quarterly report, Cook said that the company is analyzing the situation, but did not give any additional comments.
The customs crisis in the stock market has hit Apple particularly hard. Over the last two trading days of last week, the company’s market capitalization decreased by more than half a trillion dollars, and the stock suffered its worst three-day drop since the dot-com bubble in 2001.
The company is already taking proactive measures by building up its inventory. To reduce the future impact of the tariffs, Apple is sending more devices to the US market, produced in India. India is currently subject to lower duties than China.
Apple has also been gradually moves part of its production to Vietnamwhere tariffs will be lower than in China. Apple Watch, Mac, AirPods, and iPad are already manufactured there. In addition, some Mac models are also produced in Ireland, Thailand, and Malaysia.
Analysts and experts are trying to assess the impact of the 54% duty on devices from China. Some suggest that iPhone prices could reach several thousand dollars per unit.
However, in practice, Apple is likely to do everything possible — put pressure on suppliers, reduce its own margins — to prevent a rapid price increase. Prices for the flagship iPhone currently start at $999 and have not changed since 2017.
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