Apple has for years relied on Chinese factories to make its iPhones. But it’s shifting some production to India to mitigate potential Trump tariffs.
Apple CEO Tim Cook said Thursday that India will play a major role in making iPhones destined for the US market.
“A majority of iPhones sold in the US will have India as their country of origin,” Cook said while announcing the company’s latest quarterly results.
Vietnam, meanwhile, would be the country of origin for almost all iPad, Mac, Apple Watch and AirPod products sold in the United States, Cook added.
The statement comes as the tech giant examines ways to mitigate the impact of US President Donald Trump’s tariff onslaught on its supply chains as well as sales and profit margins.
Trump’s tariffs put Apple in tough spot
Apple has for years relied on Chinese factories to make its iPhones.
But Trump’s hefty duties on imports to the US, especially the tit-for-tat tariff exchanges with China, put the company in a difficult spot.
The US president has since granted a temporary reprieve for tech products, including smartphones and semiconductors, but Washington has signaled that some levies could come in the weeks ahead.
Cook said Trump’s tariffs had a limited impact on Apple in the previous quarter, but he warned that the duties, if they remain in place, would add hundreds of millions of dollars to the company’s costs in the April-to-June quarter.
“We are not able to precisely estimate the impact of tariffs, as we are uncertain of potential future actions prior to the end of the quarter,” Cook said. “Assuming the current global tariff rates, policies and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million (€797 million) to our costs.”
Shift to India but China remains key
The threat of tariffs has forced Apple to rethink its strategy.
The company has ramped up iPhone production in India in recent months, with an estimated 20% of iPhones currently being made in the South Asian country.
Despite the move to shift some production, most iPhones still continue to be produced in China, and Cook insisted on Thursday that it will continue to be where most Apple products are made for sale outside of the United States.
Apple’s sales in China, however, fell 2.3% to $16 billion in the March quarter.
The company is confronting fierce competition in the Chinese market where domestic makers such as Huawei, Xiaomi and Oppo have been gaining market share.
Apple is also experiencing delays in rolling out artificial-intelligence features.
Source : https://www.dw.com/en/apple-says-most-iphones-sold-in-us-will-be-from-india/a-72411418
