Amid escalating US-China trade tensions, Apple Inc. (AAPL, Financial) is reportedly planning to move the assembly of all iPhones sold in the US to India as early as next year. This strategic shift is part of Apple's ongoing effort to diversify its supply chain, previously reliant on Chinese production lines managed by partners like Foxconn. According to IDC, the US accounts for about 28% of Apple's global iPhone shipments, worth $232.1 billion last year.
Despite signals from the US government to negotiate with China, the country remains subject to the highest US tariffs. Past tariff announcements led to a sharp $700 billion decline in Apple's market value, prompting the company to expedite iPhone exports from India to avoid hefty duties on China-produced goods. Apple's objective is to meet the demand of over 60 million iPhones annually in the US market by 2026, necessitating a doubling of Indian production capacity.
Apple has been gradually expanding its Indian production facilities through partnerships with Tata Electronics and Foxconn. However, a significant portion of the iPhone assembly process remains concentrated in China, where much of the component supply is sourced. The US has exempted certain Chinese-made electronics from reciprocal tariffs, including smartphones and semiconductors. Investors are keenly awaiting Apple’s upcoming earnings report to gauge the impact of tariff policies.
