Apple is reportedly preparing to move production of all iPhones bound for US sales from China to India, in a switch designed to evade the worst of the tariffs set by US president Donald Trump.
More than 60 million of the flagship product are sold in the US each year, but with many of the parts either made or the entire phone assembled in China, these are now subject to heavy additional costs upon arrival to the States.
Over the past few years Apple had already started to move a significant amount of production out of China, to both India and Vietnam in particular. The Financial Times has now reported that the company is attempting to double output from India to ensure they avoid the most severe tariffs.
Additional reports suggest the tech company are set to attempt to increase production in India by up to ten per cent this year, from the current level of assembling between 30-40 million iPhones annually – with a view to having total assembly for US-bound iPhones moved by 2026.
More than 75 per cent of iPhones sold around the world are currently produced in China.
Apple reportedly moved around 1.5m phones out of India to the US earlier this month, chartering flights specially to beat the tariff imposition after the 90-day pause was announced on other nations’ tariffs.
India was initially subject to a reciprocal tariff of 26 per cent, while China’s effective rate rose above 100 per cent before Mr Trump announced mobile phones would be one of the products given a temporary exemption from additional new tariffs.
More than a trillion dollars was wiped off Apple’s share price in the weeks following the initial tariff announcements, though it has recovered around seven per cent across the past week as markets begin to settle.
The company sold more than 230m iPhones in total last year, meaning the US market accounts for more than a quarter of that. Apple are due to report first quarter earnings next week, which will incorporate the very end of the pre-tariff era from the start of this year – though consumer confidence early on in the year may still impact.
“Given that the furore has also knocked consumer confidence around the world, shoppers may still be more cautious about spending big on little devices in the months ahead, whatever AI promises are dangled,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“Apple still boasts enviable brand power, but iPhone sales have underwhelmed in the US, due to fewer upgrades than hoped.”
