Apple, the Cupertino-based tech giant, has intensified efforts to reduce production costs for the iPhone 17 line, slated for 2026, in response to the 25% tariffs promised by U.S. President Donald Trump on products manufactured outside the country. The strategy involves pressuring suppliers like Samsung and LG, responsible for OLED displays, to offer more competitive prices. Experimental production of the iPhone 17 has already begun, with mass assembly scheduled for the coming months, but heated negotiations with suppliers have sparked tensions. Sources close to the talks reveal that Apple is considering turning to Chinese manufacturer BOE as an alternative if demands for discounts are not met. The move aims to keep final prices affordable for consumers despite the tariff impact. This approach reflects the company’s effort to balance costs in a landscape of global economic uncertainties.
The push for lower prices comes at a critical time, with Apple seeking to diversify its supply chain and reduce reliance on traditional suppliers. The company is also negotiating with manufacturers of camera modules and other essential components. Trump’s threatened tariffs, which would affect iPhones primarily assembled in China and India, have prompted Apple to take proactive measures to protect its profit margins. Analysts note that OLED displays and cameras account for about 10% of an iPhone’s production costs, making these negotiations pivotal.
- Apple’s main targets: Samsung and LG, leaders in OLED displays.
- Alternative in view: BOE, a Chinese manufacturer, may gain ground.
- Tariff impact: Potential 25% increase in import costs.
- Core goal: Keep iPhone 17 prices competitive.
Negotiations with Samsung and LG
Samsung, Apple’s primary OLED display supplier, faces pressure to lower prices but resists the demands. Sources indicate the South Korean company has opted to negotiate, while LG agreed to price cuts to secure its position in the supply chain. Samsung’s reluctance may stem from its 41.4% share of the global OLED market, according to recent data. Apple, meanwhile, signals it may shift some orders to BOE, which already supplies screens for entry-level models like the iPhone SE 4.
LG, which provides displays for iPhone Pro models, saw an opportunity in accepting discounts to strengthen ties with Apple. In 2024, LG gained approval for mass production of screens for the iPhone 16 Pro before Samsung, a milestone that bolsters its competitiveness. Apple, known for fostering competition among suppliers, leverages this dynamic to negotiate better prices, especially with tariffs looming that could raise component import costs.
- Samsung’s market share: 41.4% in the OLED sector.
- LG’s rise: Gained ground with early approvals.
- BOE as an alternative: Can supply up to 100 million screens annually.
- Apple’s strategy: Diversify suppliers to cut costs.
Threat of Trump’s tariffs
The tariffs proposed by Donald Trump, announced in May 2025, have raised alarms in the tech sector. The 25% levy on products made outside the U.S., including iPhones assembled in China and India, could significantly raise costs. Tim Cook, Apple’s CEO, has warned in investor calls that the tariffs could cost the company up to $900 million per quarter. To counter this, Apple has ramped up production in India, but Trump has criticized the move, demanding manufacturing in the U.S.
The tariff threat impacts not only Apple but also other giants like Samsung, whose components are produced in countries like China and Vietnam. Analysts at Wedbush Securities estimate that an iPhone made in the U.S. could cost up to $3,500, three times the current price, due to a lack of infrastructure and skilled labor in the country.
- Proposed tariffs: 25% on imported products.
- Estimated impact: Up to $900 million per quarter for Apple.
- U.S. production: Deemed unfeasible due to high costs.
- Trump’s stance: Criticism of production in countries like India.
BOE’s rise in the supply chain
Chinese manufacturer BOE, despite past technical challenges, is emerging as a viable alternative for Apple. With a production capacity of about 100 million OLED panels per year, the company has heavily invested in infrastructure to meet Apple’s standards. Recently, BOE was approved to supply screens for the iPhone 17 Pro in the Chinese market, a milestone signaling advancements in its technology.
However, Apple’s relationship with BOE has had its hiccups. In 2022, Apple halted orders after BOE altered screen specifications without approval. Since then, BOE has strengthened quality controls and expanded production lines, aiming to capture a larger share of the iPhone market. The potential for BOE to replace Samsung in some orders heightens pressure on South Korean suppliers.
- BOE’s capacity: 100 million OLED panels per year.
- Past issues: Unauthorized changes in 2022.
- New milestone: Approval for iPhone 17 Pro in China.
- Competitive edge: Lower prices than Samsung and LG.
Strategies to keep prices affordable
Apple is adopting a multifaceted approach to mitigate tariff impacts. Beyond pressuring suppliers, the company is diversifying its supply chain, increasing production in India, and negotiating with other component manufacturers, such as those for lenses and camera modules. The strategy aims to reduce reliance on single suppliers and ensure competitive final prices for the iPhone 17.
Another focus is technological innovation to cut costs without compromising quality. Rumors suggest the iPhone 17 will feature anti-reflective screen coatings and new color options, like orange, to attract consumers. These innovations, however, rely on suppliers delivering high-quality components at reduced prices.
- India production: Growing to avoid Chinese tariffs.
- iPhone 17 innovations: New colors and anti-reflective technology.
- Diversification: Less reliance on Samsung and LG.
- Consumer focus: Affordable prices despite tariffs.
Market reactions and expectations
The market is closely watching Apple’s negotiations with suppliers. The push for lower prices could shrink Samsung and LG’s profit margins, especially if BOE gains more ground. Analysts predict that if Trump’s tariffs are implemented, the iPhone 17’s final price may rise, impacting demand in the U.S., Apple’s main market, with over 60 million units sold annually.
On the other hand, Apple’s strategy of diversifying suppliers and investing in production outside China could cushion long-term impacts. The company has allocated billions to train engineers in Asia, an advantage the U.S. cannot yet match in scale. The outcome of negotiations with Samsung, LG, and BOE will be decisive for the iPhone line’s future.
- U.S. market: Over 60 million iPhones sold yearly.
- Asia investments: Billions in engineer training.
- Price increase risk: iPhone 17 costs may rise.
- Expectations: Negotiations shape profit margins.
