Apple CEO Confirms Majority of iPhones Sold in the US Will Be Made in India
Apple’s CEO Tim Cook has confirmed a major strategic shift in the company’s global supply chain, stating that the majority of iPhones sold in the United States during the June quarter will originate from India. This development marks a significant pivot in Apple’s efforts to reduce dependence on Chinese manufacturing amid rising geopolitical tensions and trade-related costs.
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Apple CEO Tim Cook said the majority of iPhones sold in the US in Q2 FY25 will be manufactured in India, underscoring a key supply chain realignment.
Apple Accelerates India Strategy Amid Escalating US-China Trade Tensions
Speaking to CNBC after Apple’s Q2 FY25 earnings call, Cook acknowledged that the ongoing reciprocal trade policies under the Trump administration are forcing the company to accelerate its diversification efforts. India has emerged as the primary alternative for iPhone assembly as Apple seeks to mitigate the impact of a newly imposed 145% import tariff on China-origin goods.
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India’s role in iPhone production is being expanded as Apple works to avoid a 145% US import tariff on Chinese goods.
Uncertain Outlook Beyond June, But India Set to Dominate iPhone Shipments
While Apple’s focus on India is clear for the June quarter, Cook was cautious about projecting beyond that period, citing uncertainty around tariff policies. “It’s very difficult to predict beyond June,” he said. The fluid nature of trade discussions and regulatory unpredictability could further influence Apple’s sourcing decisions in the months ahead.
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Cook said the future beyond June remains unclear due to volatile trade policies, despite India’s increasing share in US-bound iPhone shipments.
Vietnam Takes Over iPad, Mac, and Wearable Production
Alongside India, Vietnam is now playing a critical role in Apple’s supply chain, particularly for iPads, Macs, AirPods, and Apple Watches destined for the US market. These product lines face a comparatively lower 10% tariff — making Vietnam a strategically viable alternative to China for non-iPhone categories.
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Vietnam is now the production hub for iPads, Macs, and wearables heading to the US, taking advantage of a lower 10% tariff versus China’s 145%.
Apple Accounts for Tariff Risks in Its Financials
In preparation for potential disruptions, Apple has built up inventory buffers and factored approximately $900 million in additional costs into its current quarter’s financial forecast. The figure, largely attributed to tariffs, was lower than some analysts had anticipated, signaling proactive cost management by the tech giant.
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Apple has budgeted $900 million this quarter to offset tariff costs, a number that surprised analysts expecting greater impact.
AppleCare and Accessories Still Hit by Full Tariff, But No Price Surge Yet
Despite efforts to shift iPhone production, AppleCare services and China-sourced accessories remain subject to the full 145% tariff. So far, Apple has chosen to absorb these costs without passing them on to consumers. According to Cook, there’s “no obvious evidence” of early consumer purchases to preempt potential price hikes.
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Tariffs on China-made accessories persist, but Apple is currently absorbing the costs, with no signs of panic buying by consumers.
Apple Reports Solid Revenue Amid Supply Chain Overhaul
Apple posted revenue of $95.4 billion for the quarter ending in March, a rise from $90.75 billion during the same period last year. The performance underscores the company’s resilience despite significant geopolitical and logistical challenges, particularly its efforts to pivot toward India and Vietnam for manufacturing.
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Apple’s revenue grew to $95.4 billion in Q2 FY25, reflecting stable performance during a complex supply chain transition.
