Home > Business > Tech

Rivals Apple, Samsung face similar challenges in wake of Trump tariffs

Published: 06 Apr. 2025, 20:06

A child uses an Apple iPhone smartphone displayed at a store in London on Oct. 6, 2024. [REUTERS/YONHAP]

The global smartphone industry is reeling after U.S. President Donald Trump unveiled sweeping new tariffs. Apple and Samsung Electronics, both with production hubs in Asia, face rising costs that could reshape global competition.

Apple, which assembles 90 percent of its iPhones in China, is confronting a 54 percent total tariff. Vietnam, home to Samsung Electronics’ key North American supply line, has been hit with a 46 percent tariff.

If enacted, the tariffs could push the retail price of Apple’s iPhone 16 Pro Max in the United States to $2,300 — a staggering 30 to 40 percent jump from its current price of $1,599, according to Reuters and the Wall Street Journal on Sunday.

Barton Crockett, senior analyst at Rosenblatt Securities, told the Wall Street Journal that the iPhones' “profit margin would shrink dramatically if Apple didn’t up the price,” later adding that a manufacturing move to the United States would be “a massive, mammoth undertaking that would take years.”

This is because Apple not only faces tariffs on imported components — such as application processors from Taiwan, displays from Korea and batteries from China — but also higher assembly costs. Crockett predicted low feasibility for U.S. assembly, noting that the $30 per unit assembly cost in China could skyrocket to $300 in the United States.

People enter an Apple store in Myeongdong, central Seoul, to buy the iPhone 16 equipped with new artificial intelligence-powered features. [YONHAP]

Samsung Electronics is far from immune to the tariff bomb but may be less affected than Apple.

Reuters said that “a potentially sharp price hike could dampen demand for the [iPhone] and give Korea's Samsung Electronics an edge, as the Asian country faces lower tariffs than China, where all iPhones sold in the United States are made.”

Samsung Electronics’ latest premium model, the Galaxy S25 Ultra, is priced at $1,299 in the United States, making it cheaper than Apple’s iPhone 16 Pro Max.

Even with tariffs, its consumer price could remain lower than the iPhone's. According to Korean research firm Counterpoint, Samsung Electronics held an 18 percent market share in the U.S. smartphone market in the fourth quarter of last year, trailing Apple in first place with 65 percent. Chinese brand Lenovo came in third with 10 percent.

From left to right: the Galaxy S23, S24 and S25 Edge smartphones are displayed during the Samsung Galaxy Unpacked 2025 winter event in San Jose, California, on Jan. 22. [REUTERS/YONHAP]

Apple and Samsung Electronics may face even fiercer competition outside the United States. If demand for Apple products declines in North America due to higher prices, the company may ramp up efforts in overseas markets to sell the stock produced in China.

“Europe, in particular, is a tug-of-war between Samsung Electronics and Apple, and Chinese smartphones are gaining fast,” said an industry insider. “U.S. tariffs could intensify competition.”

In the third quarter of last year, Apple ranked second in the European smartphone market with a 24 percent share, but thanks to the popularity of the iPhone 16 series, it rose to first place in the fourth quarter with 31 percent. During the same period, Samsung Electronics fell from first place with 32 percent to second place with 28 percent.

Although smartphones are expensive, they are considered essential, so a sharp price hike could lead to widespread dissatisfaction among U.S. consumers.

A demonstration of the Galaxy S25 Ultra’s camera features at the Galaxy S25 photo zone of the Galaxy Studio showcases the device’s low-light capabilities. [SAMSUNG ELECTRONICS]

Considering Apple’s efforts to court Trump with promises of large-scale investment, it is not out of the question that Apple might receive a tariff exemption. During his first term, Trump imposed sweeping tariffs on Chinese imports but granted exemptions or deferrals for some Apple products.

If Apple once again manages to dodge the tariffs, Samsung Electronics would be at a disadvantage. The industry expects Samsung Electronics to reduce its tariff burden by leveraging its diversified overseas production network.

Samsung Electronics produces about half its smartphones in Vietnam and around 30 percent in India, where the U.S. imposes a 26 percent tariff. The remaining 20 percent is manufactured in Gumi, Korea, Brazil and Indonesia.

Samsung has yet to announce any specific response to the new tariff landscape, stating that no final decisions have been made regarding future policy.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY PARK HAE-LEE [[email protected]]