Apple Keeps iPhone Costs Stable Amid Tariff Worries

Apple unveiled its newest iPhone series on Tuesday, featuring the new, slimmer iPhone Air with a high-performance processor and enhanced battery technology, starting at $999. 

In a strategic decision to mitigate the effects of U.S. tariffs, the company decided not to increase prices, even for models with larger storage options. 

Apple’s revamped iPhone Air took centre stage at its launch event, with CEO Tim Cook calling it the “biggest leap” in the product’s history. Designed for durability and powered by the new A19 Pro chip, it balances a thinner design without sacrificing power. The move sharpens Apple’s edge against competitors like Samsung.

The iPhone Air, set at a mid-tier price and strategically placed within Apple’s smartphone lineup, debuts as anticipated. Apple also introduced the iPhone 17 and 17 Pro flagship models, along with updated AirPods Pro and a redesign of the Apple Watch with blood pressure tracking.

The iPhone 17 base model with 256GB costs $799, the same as last year’s iPhone 16 despite doubling capacity. The iPhone 17 Pro starts at $1,099 for 256GB, maintaining last year’s price but dropping the cheaper $999 256GB option from the iPhone 16 Pro lineup.

Apple’s pricing strategy involves absorbing tariffs, expected to exceed $1 billion this quarter, to stay ahead of competitors like Samsung, Google, and Chinese brands. Apple shares slipped 1.6% after the update.

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Tom Mainelli of IDC noted Apple uses market power to keep prices steady, aiming to preserve upgrade momentum and offset tariffs that might reduce U.S. consumer spending later this year.