Apple has disclosed that it is strategically relocating the production of most iPhones and various devices destined for the U.S. market away from China, with a strong emphasis on India and Vietnam. This shift comes amid ongoing discussions about trade tariffs imposed by former President Donald Trump's administration, which focused on increasing domestic manufacturing.
According to CEO Tim Cook, the upcoming months will see a significant portion of iPhones made in India, while Vietnam is set to become a major production center for devices such as iPads and Apple Watches. The decision arises as the technology giant anticipates that U.S. import tariffs could increase its operational costs by approximately $900 million in the current quarter. This estimate remains despite the administration's choice to exempt key electronics from new tariffs, leading many companies to adapt their supply chains accordingly.
During a recent investors' call, Cook emphasized Apple’s commitment to domestic investment, revealing plans to channel $500 billion into various U.S. states over the next four years. He acknowledged the logistics of transitioning supply chains from China, stressing that India and Vietnam stand to benefit greatly. "We do expect the majority of iPhones sold in the U.S. will have India as their country of origin," Cook stated, while asserting that China will still produce most products for international markets.
Shanti Kelemen, Chief Investment Officer at M&G Wealth, noted that though tariffs will still influence Apple's supply chain, the anticipated cost of establishing new factories adds a layer of financial complexity to this transition.
Apple's shares took a hit following the announcement of reciprocal tariffs by Trump, aiming to incentivize U.S. manufacturing. Nonetheless, the company has reported steady sales, with revenues rising 5% year-on-year to $95.4 billion in the first three months of the year, largely unaffected by trade-related disruptions.
In a similarly positive trend, Amazon, another tech giant, reported an 8% increase in sales in North America's e-commerce segment, indicating resilience against tariff impacts. Amazon's CEO Andy Jassy expressed optimism about navigating these fluctuations, citing the company's ability to perform well during previous crises.
Industry analyst Patrick Moorhead commended Apple's shift to India, remarking it illustrates an impressive pivot from Cook's earlier views that exclusively linked iPhone production to China. The company’s ongoing adjustments showcase proactive measures to maintain robustness in its global operations, while the turbulence in trade relationships continues to shape the landscape for tech manufacturers worldwide.
According to CEO Tim Cook, the upcoming months will see a significant portion of iPhones made in India, while Vietnam is set to become a major production center for devices such as iPads and Apple Watches. The decision arises as the technology giant anticipates that U.S. import tariffs could increase its operational costs by approximately $900 million in the current quarter. This estimate remains despite the administration's choice to exempt key electronics from new tariffs, leading many companies to adapt their supply chains accordingly.
During a recent investors' call, Cook emphasized Apple’s commitment to domestic investment, revealing plans to channel $500 billion into various U.S. states over the next four years. He acknowledged the logistics of transitioning supply chains from China, stressing that India and Vietnam stand to benefit greatly. "We do expect the majority of iPhones sold in the U.S. will have India as their country of origin," Cook stated, while asserting that China will still produce most products for international markets.
Shanti Kelemen, Chief Investment Officer at M&G Wealth, noted that though tariffs will still influence Apple's supply chain, the anticipated cost of establishing new factories adds a layer of financial complexity to this transition.
Apple's shares took a hit following the announcement of reciprocal tariffs by Trump, aiming to incentivize U.S. manufacturing. Nonetheless, the company has reported steady sales, with revenues rising 5% year-on-year to $95.4 billion in the first three months of the year, largely unaffected by trade-related disruptions.
In a similarly positive trend, Amazon, another tech giant, reported an 8% increase in sales in North America's e-commerce segment, indicating resilience against tariff impacts. Amazon's CEO Andy Jassy expressed optimism about navigating these fluctuations, citing the company's ability to perform well during previous crises.
Industry analyst Patrick Moorhead commended Apple's shift to India, remarking it illustrates an impressive pivot from Cook's earlier views that exclusively linked iPhone production to China. The company’s ongoing adjustments showcase proactive measures to maintain robustness in its global operations, while the turbulence in trade relationships continues to shape the landscape for tech manufacturers worldwide.