BofAML: Apple's iPhone prices could increase 20% under Trump's plan

Sep. 10, 2018 10:42 AM ETApple Inc. (AAPL)AAPLBy: Brandy Betz, SA News Editor86 Comments
  • Bank of America Merrill Lynch estimates that Apple’s (NASDAQ:AAPL) iPhone prices would increase up to 20% if the company assembles in the US like President Donald Trump wants.  
  • On Saturday, President Trump tweeted that Apple should manufacturer its products domestically to avoid his proposed Chinese tariffs.
  • The tweet came a day after the release of Apple’s letter to U.S. trade representative Robert Lighthizer, which said the newly proposed tariffs would affect the Apple Watch, AirPods, Mac mini, and Apple Pencil.
  • BofAML analyst Wamsi Mohan’s estimated price increase would pertain to Apple moving 100% of final assembly to the US, which would require a higher price to offset the labor costs. 
  • Mohan finds it more likely Apple would move 10% of iPhone assembly to the US, which would raise the iPhone ASP by 8%. 
  • Mohan reiterates his Buy rating and $250 price target on Apple, a 13% upside to Friday’s close. 
  • Apple shares are down 1.9% to $217.16.  
  • Previously: Trump says Apple should shift production to U.S. to avoid China tariffs (Sept. 10)

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