Apple says most US-bound iPhones no longer made in China

Apple, a leading technology company known for its iPhones and other devices, has announced a significant change in its production strategy. The company revealed that most of the iPhones intended for the U. S. market will no longer be manufactured in China. Instead, Apple plans to shift the majority of its production to India. This decision comes in response to the tariffs imposed by President Donald Trump's administration on products imported from China. Tim Cook, Apple's CEO, stated that while India will become the primary location for iPhone production, Vietnam will also play a crucial role as a manufacturing hub for other Apple products, such as iPads and Apple Watches. This shift highlights the ongoing changes in global trade dynamics and how companies are adapting to new policies. Apple estimates that the tariffs could add approximately $900 million to its costs in the current quarter, even though some key electronics have been exempted from these new tariffs. The Trump administration has consistently encouraged Apple to bring more of its manufacturing back to the United States. During a recent call with investors, Cook emphasized Apple's commitment to investing $500 billion across various U. S. states over the next four years. He acknowledged that moving production from China to India and Vietnam will require significant time and financial investment. Cook mentioned, 'We do expect the majority of iPhones sold in the U. S. will have India as their country of origin. ' This indicates a major shift in Apple's supply chain strategy, as many consumers in the U. S. will soon be using iPhones that are made in India. Cook also noted that Vietnam will be the primary manufacturing location for nearly all iPads, Macs, Apple Watches, and AirPods sold in the U. S. However, he clarified that China will continue to be the main source for the majority of products sold outside the U. S. The transition to Indian production is not without its challenges, as it will require substantial investment and time. Shanti Kelemen, the chief investment officer at M&G Wealth, pointed out that there will still be tariffs affecting Apple's supply chains, along with the costs associated with relocating production and establishing new factories. Following the announcement of the tariffs, Apple’s stock prices fell, reflecting investor concerns about the potential impact on the company's profitability. However, shortly after the tariffs were implemented, the government announced exemptions for certain electronics, including phones and computers. Despite the trade turmoil, Apple reported that its sales remained strong, with revenues for the first three months of the year increasing by 5% compared to the same period last year, reaching $95. 4 billion. This positive performance indicates that Apple has managed to navigate the challenges posed by the changing trade landscape. In a recent press conference, White House press secretary Karoline Leavitt criticized Amazon for its reported plans to highlight how tariffs were affecting prices, labeling it a 'hostile and political act. ' Amazon, another major player in the tech industry, also reported strong sales, with an 8% year-on-year increase in its North America e-commerce business during the most recent quarter. Jassy, Amazon's CEO, expressed uncertainty about the future of tariffs but noted that the company has successfully weathered disruptions in the past, such as during the pandemic. He expressed optimism that Amazon would continue to thrive despite the challenges ahead. The shift of Apple's supply chain to India has been described as 'impressive' by industry experts. Patrick Moorhead, CEO of Moor Insights & Strategy, remarked that this change marks a significant departure from Cook's previous statements, where he claimed that only China could manufacture iPhones. This development suggests that Apple is making strides in diversifying its production capabilities. Similarly, Amazon is repositioning itself to enhance its resilience in the face of tariffs. The company is working to ensure a diverse range of sellers and believes it is well-prepared for the upcoming months. Overall, both Apple and Amazon are adapting to the evolving trade environment and finding ways to sustain their growth in the face of uncertainty.