Apple To Shift Iphone Production For US Market To India: CEO Tim Cook
Apple To Shift Iphone Production For US Market To India: CEO Tim Cook
The company has been operating in China for two decades
American multinational Apple has decided to source half of its iPhones for the US market from India. That’s because the tariffs are lower compared to China.
Tim Cook, the Chief Executive Officer of Apple, stated that the company was also procuring other products from Vietnam. However, it continues to make a ‘vast majority’ of products for other countries in China.
He confirmed that India would be the ‘country of origin’ for a large number of iPhones to be sold in the US. That’s because the US was moving away from China, owing to its high tariffs compared to the 10 percent imposed on Indian and Vietnamese goods.
Cook’s remarks followed US President Donald Trump’s announcement of reciprocal tariffs.
The CEO stressed that the company saw a ‘limited’ effect in the March quarter, as Apple was able to optimize its supply chain.
Experts claim that the tech giant would be able to keep the price of its phones almost the same if it moved the facility to India.
A cost breakdown suggested that iPhones assembled in China cost $938, whereas if the production shifted to India, it would cost $1,008. The 2 percent price increase was still cheaper compared to the 30 percent price hike of iPhones, if the company manufactured them in the US.
Owing to the trade war between the two countries, Apple plans to shift the assembly of all its US-sold iPhones to India by 2026. The company witnessed a wipeout of $700 billion from its market value after Trump’s tariff announcement.
Apple has been operating in China for two decades, spending heavily on creating a production line, which helped it to become a $3 trillion tech giant.
Thus, shifting its base to India would mean doubling its production output.
In 2024, the technology company sought to pivot towards India for iPhone production, for which its main suppliers, Foxconn and Tata, began importing already assembled component sets from China.
For the quarter ending March, Apple reported revenue of $95.4 billion, up from $90.75 billion in 2023. The iPhone revenue was $46.84 billion, Mac was $7.95 billion, and iPad was $6.4 billion.
The CEO hoped that in the current quarter, ending in June, the overall revenue would grow in the ‘low to mid-single digits’ on an annual basis. However, the forecasts beyond June seem murky if the tariff situation persists.
Recently, Trump announced reciprocal tariffs on over 100 countries, including India and China. He put a 90-day pause as several countries tried to negotiate a deal with the US. China retaliated with its reciprocal tariffs.
Currently, the US has imposed 145 percent tariffs on Chinese products, while China has imposed 125 percent tariffs on US goods.
