Apple analyst Ming-Chi Kuo said today that it would be more financially feasible for Apple to absorb 25% import tariffs on iPhones sold in the United States.
Created by a respected analyst with a long track record of accurate forecasts about the supply chain of Kuo, Apple Statement on X (East Twitter) In response to former President Donald Trump’s new pressure to Apple to transfer iPhone production to the United States. The comment follows President Trump’s danger of imposing 25% tariffs on all iPhones, which are not gathered domesticly.
In terms of profitability, it is better for Apple that I take a 25% tariff hit on iPhones sold in the US market to withdraw the iPhone assembly lines. [the] We.
The analysis approaches the current manufacturing infrastructure scale and complexity of apple, which is deeply inherent in Asia – especially China and, fast, India. Apple depends on a comprehensive network of suppliers and contract makers such as Foxconn and Pegatron, which operates all massive features that especially suit the production requirements of Apple. These partnerships are supported by decades of logistic purification and Apple is allowed to produce iPhones on a volume and cost efficiency, which will be difficult to repeat in the United States under current circumstances, if not impossible, if not impossible.
Despite being one of Apple’s most important markets, the US plays a relatively limited role in the physical assembly of iPhones. While some components, such as glass from corning, are American at origin, the final aneiphone, assembly almost completely abroad. With no guarantee to mimic the scale, cost structure, or speed of existing operations in Asia to carry forward this process, infrastructure, labor and training will require multibilian-dollars investment in labor and training.
Apple has allegedly planned to transfer most of the production in India in India for the US market by 2026. BloombergApple intends to create a source of over 60 million iPhones annually from Indian factories over the next two years. Apple’s primary assembly partner Foxconn, currently investing $ 1.5 billion in the new manufacturing infrastructure in India. President Trump posted on Truth Social before today:
I have long ago informed Apple’s Tim Cook that I hope his iPhones that will be sold in the United States, in the United States, not in India, or elsewhere. If this is not the case, the payment of tariffs of at least 25% should be thanked to the US by Apple. [sic] For your attention on this matter!
Such tariffs will be unprecedented in the scope and may lead to a significant increase in retail prices for iPhones sold in the United States. Vedbash Securities recently estimated that transferring the production of iphone in the United States may increase the cost of $ 3,500 per-unit of iphoneion by about $ 3,500.
The iphoneion user base with the US estimates more than 120 million and the annual US iPhone Shipment is more than 60 million units, even 25% tariffs will represent a small financial burden compared to the capital expenditure and operational challenges required to repeat their Asian supply chain in the US. Apple’s shares fell 3% in pre-market trading following the President’s comments.
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