On Friday, amid a tariff-induced frenzy that drove hordes of consumers to panic-buy iPhones, President Trump announced a tariff exemption on electronics like smartphones and computers. For a moment, widespread anxiety about a potential $2,000 iPhone dissipated.
But two days later, the Trump administration said smartphones and computers were likely to be hit with new tariffs targeting semiconductors, or chips. More expensive iPhones could come after all! Talk about whiplash.
Don’t panic. Even if tariffs did cause the iPhone’s price to surge, we would have plenty of cheaper options, like buying last year’s phone model instead of the latest and greatest.
The most important lesson we can learn from the turmoil: The only consistent way to save money on tech is to use devices for as long as possible, which requires maintaining them as you would a car, and upgrading only when you must.
“Buy the best and drive it into the ground,” said Ramit Sethi, a personal finance expert. “Holding that item for longer will bring down the overall cost of ownership.”
There remains lots of uncertainty around future costs of tech hardware in general. Nintendo this month canceled plans to start taking orders for its game console, the $450 Nintendo Switch 2, to evaluate the impact of tariffs on pricing and availability. Costs of some accessories, like phone chargers, power bricks and cases, have already risen on Amazon.
Here’s how to navigate tech purchases going forward.
Hold On to Devices Longer to Save Money
The best way to save money on tech is, simply, to replace your devices less often.
To understand how personal tech impacts your finances, calculate the true cost of ownership, Mr. Sethi said. Each time we buy a new phone, we end up buying more than that. Extras like a protective case, additional data storage to hold more photos and apps, and an accessory such as a power charger or earbuds add up.
Take the iPhone 16 as an example. Its $800 price tag can easily inflate to $1,080, since you may also buy:
Your total cost of ownership over three years would be about $30 a month. You could then trade in your phone to offset the cost of a new one, but those savings would again be shaved away by the next phone case and other extras.
In contrast, if you bought the phone, along with those extras, and held on to it for six years, the total cost of ownership would shrink to $15 a month.
The same principle applies to other devices like computers and tablets: The longer you hold on to your belongings, the more value you squeeze out of them.
Maintain Your Tech Just as You Would a Car
Tech products were built to be high-value, long-term investments, similar to cars. Many modern smartphones, tablets and computers were designed to last six to 10 years. But most of us still buy new phones every three years, according to research by Chetan Sharma, a consultant for phone carriers.
One common habit is largely to blame: We neglect to replace the battery, said Kyle Wiens, the chief executive of iFixit, a company that provides instructions and parts for repairing electronics.
Similar to car tires, phone batteries degrade and must be replaced after a certain amount of use, roughly every three years. An aged battery directly affects the speed and longevity of the phone. But the process of prying open a smartphone to remove a glued-down battery can be intimidating, and buying a new phone feels easier than visiting a repair shop.
Now is as good a time as ever to make replacing batteries a new habit. In the last few years, Apple, Google and others significantly improved their smartphone designs to make batteries easier to replace.
I, for one, used a hair dryer and cheap hand tools to melt the glue around my iPhone 14 and pried it open to replace the battery in less than an hour. It cost only about $50.
Apple and many phone repair shops will also do battery replacements for about $100; Apple will replace an aged battery for free for iPhones under warranty.
Repair costs are also expected to shoot up because most tech parts, like batteries and screens, come from China, according to three repair shops I interviewed. But even if a $100 battery becomes a $150 battery, that will be much cheaper than replacing an entire device, Mr. Wiens said.
Buy a Used Phone
Recent tech panic buying was driven in part by estimates from analysts speculating that tariffs could drive up the cost of some iPhone models to anywhere from $1,300 to $2,300. Apple declined to comment on whether tariffs would affect its iPhone pricing.
But even in the worst-case scenario, we would have plenty of cheaper options, just as we do when shopping for cars.
Car shoppers are well aware that they never have to buy the most recent model. They can look for used options or buy a previous year’s model for much cheaper. About 76 percent of cars sold in the United States are used, according to data by Consumer Affairs. Only 5 percent of phones are purchased in refurbished condition, meaning the products were used before being restored to like-new condition, according to research by Back Market, a site that sells refurbished tech gear.
Lauren Benton, a general manager at Back Market, said concern over tariffs appeared to be driving consumers toward older phones. Sales of a refurbished iPhone 15 Pro, which was released in 2023 for $1,000, were up significantly last week on the site, she said. The refurbished phone is selling for $639 and has a better camera than the latest $800 iPhone 16.
And if tariffs drive new phone prices up, the value of your older phone will go up, too, and trading it in would substantially offset costs, Ms. Benton said.
This is all to say don’t fear the hypothetical $2,000 iPhone.
And let’s be frank: If you’re worried about your personal finances in the current chaotic state of the economy, you should probably be thinking about more important issues than phone upgrades, like your emergency savings fund, Mr. Sethi said.
“These discussions remind me of someone seeing their entire house on fire, and what they are doing is calmly changing their shoelaces,” he said. “Panic buying an iPhone is number 662 on the list of things I would be doing.”
Content Source: www.nytimes.com