Apple CEO Tim Cook wants you to know that tariffs have nothing to do with the iPhone 17’s higher prices.
“There’s no increase for tariffs in the prices to be totally clear,” Cook told CNBC’s Jim Cramer from Apple’s Fifth Avenue store as the iPhone 17 launched worldwide [1].
Cook’s statement comes just months after President Trump took to Truth Social to threaten Apple directly with tariffs: “I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple” [2].
The iPhone 17 Pro Max with 2TB of storage costs exactly $1,999, coming in more expensive than most laptops. It’s the first time any iPhone has reached this shocking price point. And while Cook says it’s not about tariffs, his own company’s moves suggest otherwise.
Cook insisted the price hikes have nothing to do with President Trump’s tariffs on Chinese goods. But Apple’s own numbers tell a different story.
During the June quarter, Apple took an $800 million hit from tariff costs, Cook revealed during the company’s earnings call. For the September quarter, that number could jump to $1.1 billion, Cook said.
To avoid these costs, Apple has been moving iPhone production out of China. The company now makes phones in India and Vietnam, countries with lower tariffs. Cook also announced Apple will invest $600 billion in U.S. manufacturing over four years.
“We can’t be everywhere. I wish we could, but we are putting $600 billion to work in the next four years,” Cook told CNBC. “And so it is an extraordinary commitment” [1].
He called this a “domino effect” that would bring more companies to build in America. But experts doubt Apple will ever make iPhones in the U.S. The math just doesn’t work on pricing alone, not to mention logistics.
“It’s difficult to imagine where in the U.S. Foxconn could find a market with 300,000 or more workers available to hire,” Weldon Dodd from Kandji told Fortune [3]. That’s how many people work in just one Chinese iPhone factory.
If Cook won’t blame tariffs directly, what’s else could be driving the $2,000 price tag? Several other factors are at play, and they reveal how Apple thinks about its richest customers.
First, Apple packed new technology into the iPhone 17 Pro models. Apple added a vapor chamber cooling system, switched to an aluminum frame, and upgraded the cameras. The new Ceramic Shield 2 glass is reportedly far more scratch-resistant than before, too.
Second, Apple sees the iPhone differently now. It’s not just a phone — it’s a professional computer that fits in your pocket. The 2TB storage option targets video editors, photographers, and content creators who need massive storage for 4K videos and photos in the highest possible resolution.
But here’s the reality: Most people rely on iCloud or Google Photos for media storage instead of keeping everything on their device.
Users don’t need 2TB on their phone. Heck, people don’t even need 2TB on their laptops unless they’re working with a lot of video files or are heavy gamers. Apple knows this and appears to be testing how much customers will pay for the absolute best iPhone money can buy.
Third, Apple is likely using pricing psychology. By offering a $1,999 iPhone, the company makes the $1,199 and $1,599 versions look more affordable by comparison. Analysts call this “anchoring,” and Apple has used it before with its laptops and iPads. It’s a way of nudging customers up the pricing ladder.
Finally, this price sets the stage for what’s coming next. Apple plans to release a foldable iPhone next year. Based on Samsung and Google’s foldables, which cost up to $2,419, Apple’s version will likely start above $2,000. And if manufactured in the U.S., experts say an iPhone could cost over $3,500 [4].
Read more: Rich, young Americans are ditching stocks — here are the alternative assets they’re banking on instead
Wall Street doesn’t seem worried about the $2,000 iPhone. In fact, investors love it. Apple stock trades around $245 per share as of September 19, up about 3% on iPhone 17’s launch day.
Here’s why investors are thrilled even as the price widens consumers’ eyes: When Apple sells a $1,999 iPhone instead of a $1,199 one, most of that extra $800 goes straight to the bottom line.The actual cost of adding storage is a fraction of the $400–$800 markup.
This is called improving the “average selling price,” or ASP, and it means that even if Apple sells the same number of phones, revenue and profits soar since people are buying the new more expensive versions.
The company’s latest earnings showed that the strategy works. Apple posted $94 billion in revenue in its June earnings call, up 10% from last year. iPhone sales alone jumped 13.5% to $44.6 billion.
“It was an exceptional quarter by any measure,” Cook told CNBC [5].
The services business, which includes the App Store and iCloud, grew 13% to $27.4 billion. This recurring revenue stream gives Apple steady income beyond iPhone sales and signals potential demand for more storage on phones. And guess what? People with $2,000 iPhones tend to spend more on services, too.
Don’t panic — most people won’t pay $2,000 for an iPhone. The regular iPhone 17 still starts at $799. The Pro model begins at $1,099. These prices include double the storage of last year’s base models.
Carriers also soften the blow with deals. Verizon offers up to $1,100 off with trade-ins. AT&T and T-Mobile have similar promotions. Monthly payment plans offered by Apple itself or carriers spread the cost over two or three years, making a $2,000 phone “only” $83 per month.
But Apple just crossed an important line. By normalizing a $2,000 phone, even as the maximum option, the company pushes the line on what people think phones should cost. That’s without Google and Samsung’s foldable smartphones in the conversation.
Tim Cook says the iPhone 17’s prices have nothing to do with tariffs. Maybe he’s technically right about the sticker price. But Trump’s tariff threats forced Apple to completely reshape its business, spending billions to avoid the very levies Cook claims don’t matter.
“Thank you for your attention to this matter!” President Trump sarcastically wrote after threatening the 25% iPhone tariff [2]. Cook clearly paid attention, even if he won’t admit it publicly.
The $2,000 iPhone 17 Pro Max represents something bigger than a price hike. It’s Apple testing how much the market will bear, setting the stage for even pricier foldables, and proving that some customers will always pay for the best.
Whether it’s tariffs, new technology, or simple profit maximization, one thing is clear: Apple didn’t just cross a price threshold — it redefined it. And once that psychological barrier falls, it rarely gets rebuilt.
The real question isn’t whether any phone is worth $2,000. It’s whether this becomes the new normal. If Apple’s history tells us anything, today’s shocking price is tomorrow’s baseline.
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[1]. CNBC. “Apple CEO Tim Cook: iPhone price increase not related to tariffs”
[2]. @realDonaldTrump. Truth Social
[3]. Fortune. “Tim Cook says Apple’s $600 billion factory build out will create a ‘domino effect.’ But the tech giant still isn’t building iPhones in America”
[4]. CNN Business “Expert predicts how much an iPhone would cost if it was made in the US”
[5]. CNBC. “Apple reports biggest revenue growth since December 2021”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
