CEO Tim Cook said Thursday that Apple will purchase almost the entire range of iPhones sold in the U.S. from gathering facilities in India, with about 60 million phones a year. The planned move is to impose tariffs of up to 145% on China in the context of the Trump administration.
The tech giant predicts that if tariffs, interest rates and apps are now, it will have a $900 million impact on Apple’s costs in the next quarter.
“In the June quarter, we do expect most iPhones sold in the U.S. to use India as its country of origin,” Cook said at Apple’s first-quarter earnings meeting on May 1.
It appears that products such as mobile phones and computers are temporarily exempted from these products. Apple has long concentrated its iPhone production in China, leaving it vulnerable to any trade war between the two countries and sparked speculation that tariffs could mean higher prices for the company’s largest products.
By shifting third-party conventions for the U.S. iPhone to India, Apple could avoid the most significant cost pressures of the trade war, although India itself faces new tariffs.
Before the new tariffs became active, the company had already started shipping Indian-made iPhones and increased its product reserves.
iPhone and tariffs global perspective
While it is unclear how long the trade war with China will continue, Apple’s transformation is part of a larger strategy that could include more U.S. component manufacturing, said Angelo Zino, senior vice president of CFRA Research.
“Apple must think long-term with manufacturing capabilities,” Zino said. “We believe Apple will double its Indian iPhone capabilities in the next two to three years to help alleviate China’s tension in the future.”
That being said, Zino expects Apple to maintain a large amount of its business in China, as 15% of its sales will be in the country, while the global production capacity of iPhone manufacturing will still depend on Chinese manufacturing. Cook confirmed that China will “continue to be the vast majority of origin for total sales of products outside the United States.”
Zino said that although Apple will not transfer iPhone production entirely to the U.S., it may strengthen modems and in-house designed processors with Taiwan Semiconductor.
“In our opinion, it’s obviously what Apple is worth to the Trump administration, not assembling its equipment,” Zino said.
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Will Apple’s manufacturing industry be transferred to India?
Muzammil Hassan, head of India’s patent portfolio management and monetization, noted that Apple’s shift to more manufacturing in India had already occurred before tariffs were imposed.
“I don’t think it’s a temporary move,” Hassan said. “Foxconn has been training thousands of employees in Tamil Nadu. In fact, there are reports that the iPhone 17 may have been specially developed and manufactured in India.”
Hassan said that while it might be bold to transfer all iPhone production to India, Apple has not pioneered its manufacturing strategy. “I would say that the Apple team was late for the party. Samsung, Oppo, Vivo and Motorola have made their phones in India.”
In addition, Google may be migrating its pixel phone production from Vietnam to India, he said.
