Apple CEO Tim Cook announced Thursday that India will become the primary manufacturing hub for iPhones sold in the United States, marking a significant shift in the tech giant's production strategy amid escalating trade tensions.
"For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin," Cook said during Apple's quarterly earnings call, where the company reported a 5.1% revenue increase to $95.36 billion.
The announcement comes as Apple seeks to mitigate the impact of potential tariffs from the Trump administration. While electronic products including smartphones recently received a temporary exemption from the 145% tariffs on Chinese imports, Cook warned that future duties could significantly impact costs.
"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 to our costs," Cook said.
China still remains important for Apple despite diversification to India
The shift toward India represents a diversification rather than abandonment of Chinese manufacturing. Currently, about 20% of iPhones are assembled in India, with plans to source all US-bound iPhones from India by 2026.
Apple had already taken significant preemptive measures, chartering cargo flights to airlift approximately 600 tons of iPhones (estimated at around 1.5 million devices) from India to the United States to "beat the tariff," as reported by Reuters.
The company negotiated with Indian authorities to reduce customs clearance time at Chennai airport from 30 hours to just 6 hours and established a "green corridor" arrangement similar to what Apple uses at some Chinese airports. Apple's preparation included deploying about six cargo jets with 100-ton capacity each since March, adding Sunday shifts at Foxconn's Chennai plant, and working closely with the Indian government to facilitate these efforts.
Despite the production shift, Cook emphasized that China would remain critical for Apple products sold outside the United States.
"The popular conception is that companies come to China because of low labour costs. I'm not sure what part of China they go to, but the truth is China stopped being the low labour-cost country years ago," Cook years explained.
For Apple, the manufacturing diversification addresses both economic and security concerns. As Lutnick noted in an interview with CNBC, Cook "doesn't like to employ all these people overseas. That's his biggest risk—what if there was a strike in China? All of a sudden he loses production."
The value of Foxconn shipments from India to the United States surged dramatically in early 2025, reaching $770 million in January and $643 million in February, compared to $110-331 million in the previous four months.
"For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin," Cook said during Apple's quarterly earnings call, where the company reported a 5.1% revenue increase to $95.36 billion.
The announcement comes as Apple seeks to mitigate the impact of potential tariffs from the Trump administration. While electronic products including smartphones recently received a temporary exemption from the 145% tariffs on Chinese imports, Cook warned that future duties could significantly impact costs.
"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 to our costs," Cook said.
China still remains important for Apple despite diversification to India
The shift toward India represents a diversification rather than abandonment of Chinese manufacturing. Currently, about 20% of iPhones are assembled in India, with plans to source all US-bound iPhones from India by 2026.
Apple had already taken significant preemptive measures, chartering cargo flights to airlift approximately 600 tons of iPhones (estimated at around 1.5 million devices) from India to the United States to "beat the tariff," as reported by Reuters.
The company negotiated with Indian authorities to reduce customs clearance time at Chennai airport from 30 hours to just 6 hours and established a "green corridor" arrangement similar to what Apple uses at some Chinese airports. Apple's preparation included deploying about six cargo jets with 100-ton capacity each since March, adding Sunday shifts at Foxconn's Chennai plant, and working closely with the Indian government to facilitate these efforts.
Despite the production shift, Cook emphasized that China would remain critical for Apple products sold outside the United States.
"The popular conception is that companies come to China because of low labour costs. I'm not sure what part of China they go to, but the truth is China stopped being the low labour-cost country years ago," Cook years explained.
For Apple, the manufacturing diversification addresses both economic and security concerns. As Lutnick noted in an interview with CNBC, Cook "doesn't like to employ all these people overseas. That's his biggest risk—what if there was a strike in China? All of a sudden he loses production."
The value of Foxconn shipments from India to the United States surged dramatically in early 2025, reaching $770 million in January and $643 million in February, compared to $110-331 million in the previous four months.
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