China is no longer the primary manufacturing hub for iPhones destined for the US market. India has overtaken as the number one manufacturer of iPhones headed to the US. Apple’s decision to restrategise its supply chain comes amid US President Donald Trump’s hefty tariffs on China. Apple has so far managed to control the impact of tariffs, as the first-quarter profit remained above expectations. However, the company warned that the global tariff war could disrupt its supply chain in the future.
Apple anticipates that US tariffs will cost the company approximately $900 million in the current quarter, despite their limited impact earlier this year, CEO Tim Cook said during an earnings call.
Cook also noted that Apple is shifting a significant portion of its production to India, stating, “We expect the majority of iPhones sold in the US to be manufactured in India.” He added that for now, Apple’s products remain exempt from the harshest retaliatory tariffs imposed under former President Trump’s trade policies.
“We are not able to precisely estimate the impact of tariffs, as we are uncertain of potential future actions prior to the end of the quarter,” Cook said.
“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.”
While China remains the primary source of iPhones shipped to the US, production in India saw a significant boost toward the end of the quarter, according to market research firm Canalys.
Apple CEO Tim Cook stated that nearly all iPads, Macs, Apple Watches, and AirPods sold in the US will soon originate from Vietnam. However, he clarified that China will continue to be the main production hub for Apple products sold outside the United States.
In its latest earnings report, Apple posted quarterly revenue of $95.4 billion, largely driven by strong iPhone sales. The company reported $17 billion in revenue from the Chinese market alone, with overall profit reaching $24.8 billion. Despite the solid performance, Apple shares fell more than 3% in after-hours trading.
