Apple plans to produce all iPhones sold in America at its India factories by the end of 2026, accelerating efforts to shift manufacturing out of Chinese Communist Party-controlled China, its primary production hub, to avoid potential U.S. import tariffs.
Michael Acton, Stephen Morris, John Reed, and Kathrin Hille for Financial Times:
Apple plans to shift the assembly of all US-sold iPhones to India as soon as next year, according to people familiar with the matter, as President Donald Trump’s trade war forces the tech giant to pivot away from China.
The push builds on Apple’s strategy to diversify its supply chain but goes further and faster than investors appreciate, with a goal to source from India the entirety of the more than 60mn iPhones sold annually in the US by the end of 2026.
China, where Apple manufactures the majority of its iPhones via third parties such as Foxconn, has been subject to the US president’s most aggressive levies, though he has since signalled a willingness to negotiate with Beijing.
India was hit with a so-called reciprocal tariff of 26 per cent, though this is paused while New Delhi pushes for a bilateral trade agreement with the US. On a visit to India this week, US vice-president JD Vance said the two countries were making “very good progress”.
The US accounted for about 28 per cent of Apple’s 232.1mn global iPhone shipments in 2024, according to the International Data Corporation.
Reuters:
The U.S. tech giant is holding urgent talks with contract manufacturers Foxconn and Tata to achieve that goal, the person, who declined to be named as the planning process is confidential, said on Friday.
Apple sells over 60 million iPhones in the U.S. annually with roughly 80% of them made in China currently.
For iPhones, manufacturing costs in India are 5-8% higher than in China, with the difference rising to as much as 10% in some cases, the source said.
As Apple diversifies its manufacturing beyond China, it has positioned India for a critical role. Foxconn and Tata, its two main suppliers there, have three factories in all, with two more being built.
MacDailyNews Take: Better late than never, we always say!
• The time to accelerate plans to move production out of China was November 9th 2016, but, hey, six years late is better than never! – MacDailyNews, December 4, 2022
• Diversify, diversify, diversify – especially away from CCP-controlled China. – MacDailyNews, October 19, 2022
• Apple cannot divest their dependence on China quickly enough (because they started years too late). – MacDailyNews. August 17, 2022
Former U.S. President Richard Nixon, who opened relations with China in the early 1970’s, just before his death in 1994 remarked on China: We may have created a Frankenstein.
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