Apple users rush to upgrade iPhones before potential tariff price hikes

When President Trump announced robust tariffs last Wednesday that triggered a stock selloff, Joel Burke decided to head to the Apple store.

Burke, a 32-year-old policy professional in Washington, D.C., is among the throngs of U.S. consumers who have rushed to buy new iPhones over the past week, expecting that new tariffs will prompt Apple to raise prices.

“You gotta take care of your own personal needs and there’s no question in my mind that the prices are going to go up," Burke said.

It is too early to say whether tariffs that whacked Apple’s share price last week will result in an iPhone price increase, but many customers aren’t waiting to find out. Over the weekend, sales associates at two Apple stores in San Francisco said customers had mentioned the tariffs as a reason for purchasing new iPhones.

Apple’s new iPhone is expected to go on sale in September, and the company doesn’t have enough inventory to last until then, according to Ryan Reith, a senior research analyst for IDC. Apple and other hardware companies typically maintain four to eight weeks of inventory, depending on the product and timing.

Apple didn’t respond to a request for comment.

Under new tariffs on goods from China that were unveiled last week, the price to manufacture an iPhone could rise by more than 45%—from $580 to $850, according to TechInsights. It is unclear whether Apple will eat the added cost—which could ding its margins and disappoint investors—or pass it on to consumers.

Allison Post, a 69-year-old health writer and body therapist, said she had already been planning to upgrade her iPhone 8, which she has had for six years, but the tariffs spurred her to action.

“The tariffs for sure pushed me out the door," she said, adding that she also prompted her husband to get a new MacBook. “Why pay what might turn out to be double?"

Apple relies heavily on China to manufacture its signature iPhone that makes up about 50% of the company’s revenue. On Monday, The Wall Street Journal reported that Apple plans to send more iPhones to the U.S. from India to offset the high costs of China tariffs.

The company’s reliance on China has spooked investors. Shares were down 19% from Thursday to Monday, the worst three-day performance for the company in nearly 25 years.

Todd Swanson, a retired physician in Idaho, said he upgraded three phones on his six-phone plan with Verizon after the tariffs announcement.

He has taken advantage of an offer from Verizon whereby customers pay a heavily discounted price for an iPhone in exchange for signing a three-year contract with the telecommunications company.

Swanson is worried the deal may no longer be offered after the tariffs go into effect in the coming days.

“We think those deals will go away," he said.

Write to Meghan Bobrowsky at meghan.bobrowsky@wsj.com