The US tariff situation remains fluid and fraught with uncertainty; current tariffs to China stand at 145% (125% reciprocal tax + an existing 20% duty).
However, during a White House event on 22 April 2025, President Trump suggested a possible reversal in his trade conflict with China in light of ongoing market fluctuations. He stated that the elevated tariffs on Chinese products would be significantly reduced, but not eliminated entirely.
Current strategy among most device OEMs is to stockpile existing devices
According to the Trump administration, the entire consumer electronics supply chain will be reassessed during a US government investigation into semiconductors. As we approach the latter half of 2025, the landscape for device original equipment manufacturers (OEMs) is fraught with uncertainty, primarily driven by these impending tariffs. The current strategy among most device OEMs is to stockpile existing inventory of devices, semiconductors, and AI components. This move aims to sustain pricing, demand, and revenue levels in the short term, but it raises critical questions about the long-term implications for the industry.
Sales surge or shortages?
The immediate future appears to be a double-edged sword. On one hand, there is an anticipated surge in consumer device sales as US consumers rush to upgrade their devices before the tariffs take effect. This behaviour is likely to create a temporary spike in revenue, but the underlying issues remain unresolved. Should OEMs decide against passing the cost of tariffs onto consumers, they will face significant profit declines during the crucial Q3-Q4 holiday sales season. This scenario could lead to a paradox where increased sales do not translate into higher profits, leaving companies scrambling to adjust their strategies.
The Trump administration’s impending tariffs have already created a climate of revenue uncertainty, exacerbated by ongoing supply shortages due to stockpiling. The ambiguity and exemption scopes, coupled with fears of a global recession, could stall major production improvement projects for OEMs. This stagnation would further complicate revenue estimations, making it increasingly difficult for companies to plan for the future.
Apple poised to feel the squeeze
Apple, the US’s flagship mobile device company, is poised to feel the brunt of these tariff impositions more acutely than its competitors, Samsung and Google. Apple’s heavy reliance on China for its supply chain means that any tariff-related price increases could significantly impact its bottom line.
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By GlobalDataWhile the temporary exemption for smartphones offers Apple a short-term reprieve, the long-term outlook remains precarious. If Apple manages to secure a permanent exemption, it could force rival Samsung to reconsider its production strategies, potentially shifting more manufacturing to the US to safeguard its revenues.
Device components and a looming crisis for OEMs
The supply chain disruptions caused by tariffs are likely to have a cascading effect on the market. A significant portion of device components sold in the US comes from countries facing the steepest tariff impositions, which will in return spike device prices.
Higher prices for premium devices will lengthen US consumer upgrade cycles beyond the beyond the present three-and-a-half year period, directly impacting OEM revenues.
As we look toward 2026, any sign of revenue stability in this volatile environment will be viewed as a significant achievement.
The looming tariff crisis presents a complex challenge for device OEMs, one that will require strategic foresight and adaptability to navigate successfully. The outlook is clear: the road ahead is fraught with challenges, and only the most agile companies will emerge unscathed.
