Apple (AAPL) Swallows Tariff Pain, Holds iPhone Prices Firm in Bold Competitive Play

Apple just made a power move that's rocking the tech world—absorbing tariff costs instead of passing them to consumers. The tech giant's latest iPhones hit the market with unchanged prices, defying expectations of a price hike.

The Strategic Gambit

Rather than bumping prices and risking market share, Apple's eating the costs itself. That's corporate muscle flexing at its finest—showcasing both pricing power and competitive aggression in one slick move.

Wall Street's watching closely as Apple balances margin pressure against market dominance. Because in today's economy, maintaining competitive pricing might just be the smartest growth strategy out there—even if it means temporarily sacrificing some profit padding. Typical finance move: prioritize perception over reality until the numbers catch up.

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Apple Takes Tariff Hit to Stay Competitive

Among Apple’s key new launches was the iPhone Air, which boasts a high-density battery and a brand new processor. The iPhone Air will be priced starting at $999, which is between the company’s other models, as expected by some analysts. The iPhone Air will compete with Samsung Electronics’ (SSNLF) Galaxy S25 Edge.

Furthermore, the price of the iPhone 17 base model’s 256-gigabyte version will start at $799, which is the same as the cost of the iPhone 16 model with half the storage space. Also, Apple’s iPhone 17 Pro has a starting price of $1,099 for a 256-gigabyte model, the same as the previous year’s iPhone 16 Pro with the same storage size. Additionally, the company kept the prices of its watch models and the new AirPods Pro 3 intact compared to the previous models.

Overall, through its pricing strategy, Apple has indicated that it will absorb tariff costs to remain competitive in the market, given the intense rivalry from Samsung and domestic players in China. Apple had earlier cautioned investors of a $1.1 billion tariff-related hit to its September quarter results. In the June quarter, the company recorded tariff-led costs of $800 million.

Is Apple Stock a Buy, Hold, or Sell?

Given macro pressures on consumer spending, intense competition, and tariff woes, Wall Street is cautiously optimistic on Apple stock. The Moderate Buy consensus rating on Apple stock is based on 16 Buys, 13 Holds, and one sell recommendation. The average AAPL stock price target of $239.35 indicates a modest upside potential of 2.1% from current levels.